Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Draghi On Deck... Stock Market Waiting On His Decision On Stimulus....

Stock-Markets / Stock Markets 2016 Mar 10, 2016 - 10:47 AM GMT

By: Jack_Steiman

Stock-Markets

We have had a bifurcated market for the entire year. The Nasdaq is now down nearly 7% for the year, with the S&P 500 down only a drop over 2%. Why is that you ask? Simple really. The bear market is froth, but still hasn't died as evidenced by the action in the world of the FANG!! Facebook, Inc. (FB), Amazon.com Inc. (AMZN), Google Inc. (GOOG), and Netflix, Inc. (NFLX), all slaughtered big time today, along with all of them losing key, exponential moving averages. Some lost all three in today's action alone. Merciless selling in leaders with high beta and higher P/E's.


The sign of a market is not ready to blast to all-time highs. Instead, what we're seeing is an agnostic market with no one fully in control as money rotates around. Now the money is running in to the world of the multi-year, slaughtered commodity stocks. Huge moves higher in to commodities and energy, and, yes, energy is the biggest weighting in the S&P 500, and, thus, why it's nowhere near as bad as the Nasdaq. No one wants high beta, high P/E stocks. They, for the most part, are RISK OFF. Lower P/E is risk on. The market doesn't want to just completely quit.

It wants to hang in, but the overall behavior in the old leaders tells me this year is going to be extremely difficult for everyone. You have to be very careful not to get emotional and fear missing out. Your money is not safe just anywhere, such as we saw for years in the bull. It's a different market now, and needs to be respected for what it is, not what it was. Hoping for things to be as they were in the land of froth probably isn't going to be very beneficial to your wallet. The market is making a very clear statement about how it feels about those old leaders. Never argue with the message of the market, nor play it with a wishful approach.

Things are what they are and if you take a long look at the action in the world of the Nasdaq you will see price doesn't lie. The old leaders are just that, old leaders. There is no sustained leadership anywhere in this market. Just because commodities are having a short-term happy time doesn't mean they're the leaders, nor the leaders you'd want anyway. In a real bull market, you see froth and beta leading with commodities struggling. The opposite is taking place, and that needs to be respected and understood in order for all of you to perform well with your trading. The old guard is out for now. Maybe it means we continue to just meander about overall. Bottom line is we're in a massive trading range for the moment. Be very careful where you place your hard earned dollars going forward.

The move off the bottom has been nice. We had readings on the sentiment front that were extreme, and the bears paid the price for that type of bearishness. Each and every day it becomes less of an issue as the bull/bear spread becomes more and more of a non-factor for the market. We should be decently above the zero line when we get the new numbers this Wednesday. While the number is still more favorable for the bulls, it is no longer relevant as an extreme for the bulls to hang their hats on. With that out of the way, the market will trade on overnight news out of the usual spots meaning Europe, China, and Japan.

We will also be paying close attention to the numbers that come out on our economic front. The key reports for March reporting are behind us. We saw those readings last week when we had the ISM Manufacturing Report and Services Reports along with the Jobs Report. There are smaller, but still important, reports popping up all the time that carry some weight, but the big reports are over for another three or four weeks. We will learn a lot about the market and what its intentions are as time moves along. Can the bears establish a down trend, yet again, or whether the bulls are strong enough to keep things mostly status-quo.

Back and forth swings to nowhere for the most part. We watch the usual oscillator price relationship on both the important sixty-minute and daily-index charts. I get the feeling both sides are going to continue to have their moments in the sun, probably no clear cut winner either. The bears need to get busy soon for they've lost their momentum. They've allowed the retail buyer to take control again as they gobble up all pullbacks. It's not a lost cause for them, but the longer the market hangs tough the more you'll see the bears give it up. They're very used to, and, I'm sure, tired of being on the wrong side of the trade. They need to get busy sooner than later.

The S&P 500 has an easy chart to read. We have a double top at 2009 and 2006 from Friday and today. If the S&P 500 can close above 2009, I'd say look out above. Should be difficult to do in the short-term. On the down side we look at key support levels on the daily chart. 1948, 1946 and 1937 are a cluster of support numbers close together. They are the 50-day, 20-day, and gap numbers, respectively. If the bears can close this below 1937 they're in business, but that won't come easily at all. Bottom line is the tough environment continues on for 2016. Day to day with no stress is best. Keep it light, and, for now, be careful with high-bets froth stocks.

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Sign up for a Free 15-Day Trial to SwingTradeOnline.com!

© 2016 SwingTradeOnline.com

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in