Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Slays the Doomsayers... Pullback Due..

Stock-Markets / Stock Index Trading Nov 09, 2009 - 08:22 PM GMT

By: Jack_Steiman


Of course, that doesn't mean we can't and won't pull back because we will. We will have selling episodes that feel bad, but with the bears unable to take out those 50-day exponential moving averages with force, there is nothing bad going on for the bulls. We did break below on a closing basis on the S&P 500, but barely. The Nasdaq lost by a bit more but the Dow never broke. I wrote a nightly commentary on this.

Without all three major indexes closing below the 50-day exponential moving averages, the bears still hadn't taken control of the market.

The S&P 500 clung close, even though it closed below, and then shot back through on good economic, and even better earnings reports. I also don't want you to think I am wildly bullish because I am not. I am far more bullish than bearish as the buy signal still remains clearly in place, but that doesn't mean go nuts here. The same care and safety must continue so we can weather the bad days and not feel like the world is ending.

We are now very overbought on all the major index charts on the 60-minute time frame. We will need to pull back soon, especially since we're so close to major resistance on the S&P 500 at 1101. It's unlikely that we'll be able to just break through so intensely overbought. It should be the type of selling that is contained now by the 50-day exponential moving averages underneath. 3-4% should be the maximum selling now. With strong internals on the up days you'd have to think that the bulls will undoubtedly defend critical support now.

They held these 50-day tests recently and with the strong move made back above, they aren't going to be willing to give it back. The 60's unwind quickly so it shouldn't take too much to get them neutral and then oversold if the selling gets strong enough. With the daily charts nowhere near overbought, this makes the selling to come less likely to be too intense. We can go a bit higher but selling should ensue soon. For now, any overbought selling can be used for buying good set ups which exist just about everywhere.
See all of today's charts: INDU (Dow Industrial Daily), SPX (S&P 500 Weekly), SPX (S&P 500 Daily), RUT (Russell 2000 Daily), WLSH (Wilshire 5000 Daily), DJUSAE (Dow Jones US Aerospace & Defense Sector) at SwingTradeOnline.

Today saw the market gap up after the futures shot up on strong action overseas. From Asia to Europe and finally to us. They held all morning, although there were some selling attempts. We gapped up, churned for a few minutes, and then ran higher all day. The reason today was important was because you wanted to see the bulls follow through after taking back lost 50-day exponential moving averages on the S&P 500 and Nasdaq. The fight to get them back came fairly easily, but now we wanted to see if the bulls could put a strong gap day under their belt, and they accomplished it without too much of a headache from the bears. Solid action for the day with the bulls now having added support under their belts with today's strong gap up. Every gap up helps folks. They should not be taken for granted and now we have solid support added to the bullish scenario.

The dollar just continues to explode. (See: (UUP) PowerShares DB US Dollar Index Bullish, which is not one of our charts today but can be seen online at Yahoo Finance.) All the gains from the additional added shares are now basically gone. The dollar bears continue to have their way with things. Breakdown after breakdown is taking place with just a few small oversold bounces along the way. It gets a few small positive divergences on the shorter time frame charts as things get oversold but they get wiped out rather quickly. Whenever the dollar hits anything resembling strong resistance, it just coughs it up and turns right back down. Very negative action, that for now, is showing no desire to turn the tide. Sadly, this means the market is doing well. A bad dollar equaling a strong market isn't exactly the best of both worlds, but it is what it is.

With the market so close to 1101 on the S&P 500, I'd recommend watching a bit right here. There are so many wonderful set ups around, and they can be played, but most of them are very overbought, and like the market, could use a small pullback. When it comes, I will fire out more plays. For now, please move ahead slowly. If we blow through 1101, we'll be violently overbought and will need a back test thus we won't miss anything and we're in two plays.
Be appropriate, not greedy.



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 30-Day Trial to!

© 2009

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.

Jack Steiman Archive

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


09 Nov 09, 20:24
Jacks excuses

Full of excuses for being wrong.

barely 2 days you wrote -

The week ahead shouldn't be too intense. Oh, you'll see your share of moves up and down and we can still test down to 1020 in time on the Sp

Post Comment

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