Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Implications for Stock Market - Nadeem_Walayat
2.Odds of Winning Walkers Crisps Spell & Go olidays K, C and D Letters - Sami_Walayat
3.Massive Silver Price Rally During The Coming US Dollar Collapse - Hubert_Moolman
4.Pope Francis Calls For Worldwide Communist Government - Jeff_Berwick
5.EU Referendum Opinion Polls Neck and Neck Despite Operation Fear, Support BrExit Campaign - Nadeem_Walayat
6.David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - Mike Gleason
7.British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - Nadeem_Walayat
8.Gold Price Possible $200 Rally - Bob_Loukas
9.The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - Michael_Swanson
10.Silver Miners’ Q1’ 2016 Fundamentals - Zeal_LLC
Free Silver
Last 7 days
U.S. Household Debt Still Below 2008 Peak - 25th May 16
Brexit: Wrong Discussion, Wrong People, Wrong Arguments - 25th May 16
SPX is at Strong Resistance - 25th May 16
US Dollar, Back From the Grave? - 25th May 16
Gold : Just the Facts Ma’am - 25th May 16
The Worst Urban Crisis in History Could be Upon Us - 24th May 16
Death Crosses Across The Board Are IRREFUTABLE Stock Market Sell Signals - 24th May 16
Bitcoin Trading Alert: Bitcoin Price Stays below $450 - 24th May 16
Stock Market Crash Death Cross Doom Prevails - 23rd May 16
Did AMAT Chirp? Implications for the Economy and Gold - 23rd May 16
Stocks Extended Their Rebound On Friday - Will They Continue Higher? - 23rd May 16
UK Treasury Propaganda Warns of 3.6% Brexit Recession, the £64 Billion Question? - 23rd May 16
Stock Market Support Breached, But Not Broken! - 23rd May 16
George Osborne Warns of 18% Cheaper House Prices - BrExit for First Time Buyers - 22nd May 16
Gold Bull-Phase I Continues to Confound (The Trek to “Known Values”) - 22nd May 16 r
Avoiding a War in Space - 22nd May 16
Will Venezuela Be Forced to Embrace the US Dollar? - 21st May 16
Danish Central Bank Stumbles with Its Currency Peg to the Euro - 21st May 16
SPX Downtrend Underway - 21st May 16
George Osborne Warns of More Affordable UK Housing Market if BrExit Happens - 21st May 16
Gold And Silver 11th Hour: Globalists 10 v People 0 - 21st May 16
David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - 21st May 16
Gold Stocks Following Bull Analogs - 20th May 16
The Gold Chart That Has Central Banks Extremely Worried - 20th May 16
Silver Miners’ Q1’ 2016 Fundamentals - 20th May 16
Stock Market Rally At the End of the Road? - 20th May 16
British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - 20th May 16
NASDAQ 100, FTSE, and British Pound - When Rare Market Data Screams, Listen  - 20th May 16
Unintended Consequences, Part 1: Easy Money = Overcapacity = Deflation - 19th May 16
The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - 19th May 16
Stock Market Final Supports Are Broken - 19th May 16
Gold - Pro-Inflation? Anti-USD? - 19th May 16
Further Stock Market Uncertainty As Indexes Gained On Friday, Will Uptrend Resume? - 19th May 16
What This U.S. Presidential Election Tells Us About Her Millennial Generation - 18th May 16
Stock Market Trendline Broken on Fed Announcement - 18th May 16
An Incredibly Simple, Rarely Used Way to Book 170% Investing Gains - 18th May 16
Statistically Significant Stock Market Death Cross? - 18th May 16
Precisely Wrong on US Dollar, Gold? - 18th May 16
What You Can Gain From One Tech CEO's $355 Million Loss - 18th May 16
The ‘Tide’ has turned… NEGATIVE For STOCKS!!! - 18th May 16
Goldman Sachs's - Regulatory Climate is Chilling Deals; Hatzius Not Worried About a Recession - 18th May 16
Bitcoin Price Remains above $450 - 18th May 16
Crude Oil Price Trend Forecast 2016 Implications for Stock Market - 17 May 16
Could the National Debt Really Grow as High as $31 Trillion by 2023? - 17 May 16
Gold Price Possible $200 Rally - 17 May 16
Crisis Investing - Jim Rogers on “Buying Panic” - 17 May 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

Stock Market Rally Keeps Going.....Fed Responsible Again....

Stock-Markets / Stock Markets 2016 Mar 19, 2016 - 05:31 AM GMT

By: Jack_Steiman

Stock-Markets

What is left to say that hasn't been said already. When you look at the charts from this report over the weekend, you will see that they are very self-explanatory. It's been a straight up move leaving the bears feeling sick. You would think that after so much upside action, the market would have hesitated at the S&P 500 2044 gap. Not to be. Right through at 70 RSI on the daily chart. The Dow got to near 81 RSI today on its sixty-minute, short-term chart. Nothing stopping this machine.


All of this began when Mr. Dimon of JPMorgan Chase & Co. (JPM) bought an amazing amount of his own stock. I believe that was planned. I also believe that after the Ms Yellen cut back on the rate cuts she ordered other banker's CEOs to buy back shares. Sure enough, that's what happened late yesterday. If you remember my letter from Wednesday, I spoke about how the banks needed some magic out of the blue, and, sure enough, it came the very next day. There are no accidents, folks. All very carefully constructed.

Yellen knew she needed to do something after she became extremely dovish on rates again, because that's bad news for the financial world. She never is out of bullets, and she knew how to fix the problem. Thursday the problem was more than solved with the buy-back trick. The bears just don't have much of a chance big picture when the world central bankers want the market to head north. Make people happy when they get those 401k quarterly reports. She's a master mind at manipulation through perfect timing. Give her an A+ for doing what's necessary at just the right time. So today was yet another happy day for those frothing bulls who believe nothing can get in their way. Nothing can stop them from all-time highs to come, and they may be right, but there are headaches as always to try and prevent that from occurring. The monthly charts being the biggest culprit, but for now they can dream the dream. And why not? With Yellen covering your back, there's good reason to feel confident about the future, deservedly so or not.

2080 on the S&P 500 is both horizontal resistance and down trend line support. We will watch that area for a possible short-term top. This is only 1.5% away, and the reason it should stop there for at least a while is the overbought conditions that will exist on the daily charts once we do get that high. The Dow RSI would be approaching the upper 70's. And again, that's on the daily chart, and simply unsustainable over time. The S&P 500 would be well over 70. It would likely be approaching the mid 70's, thus, you get the idea. A rest will have to take place soon, and yes bulls, you'll have to deal with a bit of selling. You'll survive. It doesn't have to get as high as 2080 as we're already very overbought on many time frames. But if the market has its head down enough it's possible it could make its way towards 2080 over the next few days. The key to all of this in terms of the bigger picture is how we sell when the overbought RSI conditions cause a sell off. We will need to watch the daily, and short-term, sixty-minute charts for potential negative divergences if the oscillators sell hard. No worries now, but when that selling does kick in with a bit of force, we will gain a lot of insight once things unwind.

Look folks, I get it that things don't make sense fundamentally, but that's not our worry. We know why the market is rocking. It is not interested in the real world. It's interested in stimulus and low rates and nothing else. It keeps the bulls in the game, instead of looking for a home for their money elsewhere away from the market. Don't let emotion allow you to do things that aren't in concert with the action we're seeing. Never say it's wrong. Price is never wrong. It simply is what it is. Play what the market is telling you to play. Don't play what you think it should do.

A day at a time and let's see if we can finally, at some point next week, find some selling to unwind very overbought short term conditions.

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.


© 2005-2016 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

Catching a Falling Financial Knife