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
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Trading Between The 20's And 200's...

Stock-Markets / Stock Markets 2016 May 24, 2016 - 10:54 AM GMT

By: Jack_Steiman

Stock-Markets

For fourteen of the past fifteen days the S&P 500 has been trading between the 20- and 200-day exponential moving averages. Neither side has been able to take control. Boring beyond words. Day after day we move basically nowhere. The volatility is gone for now. I have no idea what catalyst will come along to allow for a breakout, but you don't know if you can even trust when the move occurs. The 20-day is at 2059. The 200-day is at 2024. When one breaks we should expect a directional move. It should, but who knows for sure. This market has opposing forces working. The bulls have the Yellen. Low rates are here to stay. Yes, we'll see a rate hike in June, but she won't be promising anything aggressive after that as the global economic environment is not good. Rates will still be very low after the June hike, so big money won't likely be running out.


If Yellen promised rapid hikes, one after the other, then the market would simply crash out, but there's no chance that will occur. So we deal with an uncertain market day after day, but since the spread is only 1.5% the market will be forced to make a move soon, and trust me folks, it could go either way. No new catalyst is at hand, although it's amazing how one shows up when it needs to. The daily charts are slightly more favorable than not, so the onus remains on the bears to take away the bullish trend. MACD's have unwound to zero, or below with stochastic's, and RSI's all in fine shape. Of course, that guarantee's nothing as the wrong news can take away the good vibes on those oscillators. Bottom line is for the short-term the focus is on S&P 500 2024 and 2059. Hopefully, the powers that be will show some mercy and allow the market to finally make a move. It can't happen soon enough for this writer.

One thing that can't be argued is that the market has handled every drop of bad news out there without blinking. Negative divergences are still there on the monthly index charts. Declining economic activity is still part of the global picture. The S&P 500 is trading near a 24 P/E, while earnings decline. Impossible to sustain one would think. Yellen is telling us that we have the rate increase coming in June. Nothing has hurt this market. I don't understand it, to be honest, but the bulls are still in overall control. Other than something very unexpected there is nothing else this market should have to deal with short-term that would be considered bad news.

If something positive were to come out of the blue, such as next month's ISM Manufacturing Report, then this market would have a positive catalyst to help it out. We'll get that report right after we come back from the Memorial day holiday next Monday. It doesn't have to be anything amazing. You get the feeling that since the market is hanging in so well, it would only have to be a drop of good news to get the bulls screaming for more upside action. We take it day to day, hoping for a move above 2059 or below 2024, but until it does it's your job not to get overly involved. Anything you play you should consider high risk. Keep stops tight, folks.

One last thing before I go. In markets, such as these, the tendency is to get bored, and, thus, annoyed with the action. This often causes folks to play more than they should. When there isn't much going on and you're staring at the screen, you want the action, and that's dangerous. Don't be that person. Keep it light, and do something else with your time, until the market breaks one way or the other at the levels mentioned above. It is a very boring market. Don't let that cause you problems unnecessarily.

Peace,

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