Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Expanded Zone Of Importance....Bears Do What They Do Best...

Stock-Markets / Stock Markets 2016 Sep 13, 2016 - 03:15 AM GMT

By: Jack_Steiman


On Friday we had one those gigantic down days we see every so often on big volume and a horrendous On Friday we had one those gigantic down advance decline line. The type of move off a top that almost always leads to more immediate down side. That is, until we moved from the stock market to the fed market where all seems to be well no matter what is taking place in the real world economy.

It seemed to matter a little bit at least when the trio of bad reports came out, which included Jobs Report, ISM Manufacturing Report, and Services Report. It mattered even more when there was even the hint of a rate hike coming in September, or at least, very soon. The drop on Friday took us seven points below the breakout level of 2134, but the bears just couldn't find the ability to keep the market short-term oversold, and the rally was on. We're back above 2134, and now that this level has been taken back it's clear the bears still don't have the fuel or belief to take this market appreciably lower.

It was there for them, but after we hit 2119 at the open, the buying was on and on in a big way. This leads us to look at the market from a different perspective about which levels matter. 2194 is still the August double top, but now that 2134 no longer matters, we search for the key level of support and it's the trend line at 2100. A move below that on a closing basis would be far more bearish, while a move over 2194 would be extremely bullish on a closing basis as well. When you are playing with a meaningless 5% spread between bull and bear the emotions will only expand. You need to be extremely careful as whipsaw is likely to increase quite a bit. The vix is now also a bit higher, thus, volatility is back to some degree at least. Be prepared for more emotional swings folks. The bulls and bears continue to play tag. No one is winning short-term, but long-term the bulls are in control above 2100. ONLY when that level goes away on a closing basis should the bulls feel threatened that their run is ending.

During bear markets we often see these powerful one to two day up moves that make you think the bear has ended. The Dow up often near 300-400 points with the Nasdaq up a hundred, or so. We are having those types of days now in the bull market. Brexit and Friday saw gigantic moves between one and two days, but in the end the bulls didn't allow for things to go lower. They took back control quickly.

The breadth was so powerful on Friday you had to think it was a slam dunk for further follow-through to the down side today, but it was not to be. After a quick gap down the bulls flourished. This is what we see in bull markets. Still no signs out there folks that the bear is taking over. I actually feel bad for the bears as all the news is on their side in the real world, but in the world of the stock market it's still bad news is good news. Maybe it's bad for a day, but that's it. We don't have to understand it, nor should we really waste our time trying to.

Just accept price behavior and adapt. The environment, due to whipsaw action, is extremely difficult to play. When that's the name of the game, you should probably ease up on playing. Always do what's best for you, but this type of action causes a lot of emotion, which tends to bring about bad entries and exits. Keeping it lighter until we lose 2100, or blow through 2194, may seem tough to do, but it's going to be very hard to play appropriately in between. The huge open spread is upon us. Accept it and you'll be fine. Day to day as usual.



Jack Steiman is author of ( ). Former columnist for, 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!

© 2016

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.

© 2005-2019 - 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