Best of the Week
Most Popular
1.UK House Prices BrExit Crash NOT Likely Despite London Property Market Weakness - Nadeem_Walayat
2.BrExit Morning - New Dawn for Britain, Independence Day! - Nadeem_Walayat
3.LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - Nadeem_Walayat
4.BrExit Implications for UK Stock Market, Sterling GBP, House Prices and UK Politics... - Nadeem_Walayat
5.Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - Nadeem_Walayat
6.FTSE and Sterling Brexit Trading, Deconstruction of the EU Referendum Result - Nadeem_Walayat
7.UK Interest Rate Cut to 0.25% Imminent and More QE Money Printing - Nadeem_Walayat
8.Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - Nadeem_Walayat
9.The Stock Market is Reading it Wrong! - Chris_Vermeulen
10.Breakouts Galore in Gold and Silver - Jordan_Roy_Byrne
Free Silver
Last 7 days
Underpriced Silver Is the “Rip Van Winkle” Metal - 25th July 16
Declines in Multiple Market Indexes - 25th July 16
Retailers Are Doomed as Most Americans Are Too Poor to Shop - 25th July 16
Here’s One Currency That Could Go to Zero - 25th July 16
Stock Market Top is Expanding - 25th July 16
Silver Manipulation – Because They Needed the Eggs - 25th July 16
Silver Market COT Stuns: What's Going On Here? - 24th July 16
Gold Demand Remains Stable During Sector Weakness - 24th July 16
Sernova, Diabetes and Haemophilia - 24th July 16
Russia: Tensions, Turmoil, and Western Hubris - 24th July 16
Soybean Commodity Price to Soar Again - 23rd July 16
SPX Stock Market Uptrend Continues - 23rd July 16
Gold And Silver – Debt Addiction Will Carry Precious Metals Higher, Guaranteed - 23rd July 16
Pokemon Go - How to Play, First Use, Balls, Stops, Catching Pokemon's... Great Excercise! - 23rd July 16
7 Signs That the Gold Market Remains Resilient - 23rd July 16
Basic Income in The Time of Crisis - 23rd July 16
Silver Bull Faces Correction - 22nd July 16
The Serious Warning No One’s Talking About - 22nd July 16
Stock Market Insight from Greed, Volatility, and Put/Call Ratio - 22nd July 16
What Will Happen To the Stock Market When Interest Rates Rise? - 22nd July 16
How to Escape the World’s Biggest Ponzi Scheme - 22nd July 16
Addicted to Debt - We Can’t Borrow from the Future Anymore - 21st July 16
Not Everything Is Bullish for Gold - 21st July 16
Don’t Get Sucked Back Into the Stock Market - The Big Picture Hasn’t Changed - 21st July 16
Silver – Caught Inside - 21st July 16
Forex: "The Markets Are Getting Exciting!" - 20th July 16
China Economic Troubles - Is Kyle Bass Finally Getting His Revenge? - 20th July 16
Why Lithium Will See Another Price Spike This Fall - 20th July 16
The Peak Oil Paradox Revisited - 19th July 16
SPX Challenges the Upper Trendline - 19th July 16
Missing ’28 Pages’ of the 9/11 Report Released into Blitzkrieg of World Events - 19th July 16
Likelihood of Organized Disruption at GOP Convention - 19th July 16
More on the ‘Breadth Thrust’ and Stock Market Internals - 19th July 16
FX Traders: Get a Free Week of Forecasts (Details inside) - 19th July 16
Ups and Downs in Gold and Crude Oil Price - 19th July 16
Keep an Eye on ‘Bitcoin’ as the Next ‘Financial Crisis’ Starts! - 18th July 16
Erdogan Might Have Known about the Coup but Didn’t Prevent It on Purpose - 18th July 16
More Deflation Ahead: Silver, Gold And Their Mining Stocks A Must-Have - 18th July 16
Stock Market Minor Top? - 18th July 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

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