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
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
NVIDIA THE KING OF THE METAVERSE! - 10th 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
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th 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
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
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 60's Unwinding...Economy Stinks....

Stock-Markets / Stock Markets 2010 Jul 29, 2010 - 03:07 AM GMT

By: Jack_Steiman

Stock-Markets

There's a little twist for a title. No matter what these CEO's tell you, the economy has hit the wall. The FOMC Minutes came out today, and they didn't paint a pretty picture at all. It showed how things are slowing down, and that there really isn't too much economic activity, or life, going on out there these past few months. It's scary because this earnings quarter brought about a lot of company's saying things were so good that we're raising guidance. Ouch!! Raising guidance just as things are hitting a stone wall doesn't seem like the best of timing.


Unless things turn around in a hurry, all the earnings reports won't be worth anything. The market will start playing what's coming, not what has been. There just never seems to be a report that gives much hope to economic growth. All the reports are showing deterioration no matter where you look, from housing, to manufacturing, and everything in between.

No matter what the sentiment numbers tell us, and they are definitely on the side of the bulls, they will be ignored soon enough if the economic activity doesn't blast higher. They are not at extremes. 3.3% more bulls is great for the bullish case, but that number can invert to minus 10%, or more, if the market wants to sell. It's not at levels that can't support some decent selling if the news is bad enough, and it is heading in that direction.

Now let's focus on the technicals, which, of course, speak loudly, as we know. I wanted a bit more selling to unwind those short-term charts, or the 60-minute charts, that tell us what's happening over the next several days. The stochastic's on these charts on both individual stocks, and those index charts, got near 100 across the board a few days ago while RSI's cleared over 70, in some cases near, or slightly above 80.

That's an unsustainable combination, and thus, you have the selling over the past few days to help unwind these readings to neutral, or even oversold, in terms of stochastic's. Most of them now have readings below 10 on stochastic's, and are at 50, or lower, on the RSI's, which is fabulous in terms of unwinding, especially when you consider how little the market has surrendered in terms of price. So the technical action is good and appropriate, even though the economic news says things could, and probably should, be a lot worse.

Now we search over to the internals to see if things are selling on increasing volume, and a dreadful advance decline line. While things were down, basically 2 to 1 in terms of decliners over advancers, this doesn't come close to the way things went up quite a few days at 3 to 1, or better. So nothing bad there in terms of too many stocks declining in the overall pattern set up off the most recent price bottoms in the market. In terms of the volume on the selling, the news is good there, as it has declined by quite a bit on the selling over the past couple of days. While volume is truly only important at big levels of breakouts, or breakdowns, it's good to see no distribution or big money selling things off as we trade above 1099. Bullish internals overall.

In terms of critical support, we know 1099 was huge to get through, but we also have the 50-day exponential moving average at 1095.

A huge confluence of support only 4 small points apart. We came very close to 1099 today, but held above. One could argue, now that the trend line is at 1080, that even if we fell to 1080 things are fine. I'm not really in that camp, but I can see that argument. I think it would show a healthier environment if the market held the 1095 to 1099 on a closing basis. With the way economic news is hitting, you can't rule out a test of 1080. If that level was to fold, the market would likely free fall lower, but for now I don't think that's in the cards.

There's not much to get overly excited about folks. The earnings and sentiment issues are on the side of the bulls, but the economic activity is huge on the side of the bears, and that can't be dismissed by hope. With the economy the ultimate leader of things, we have to watch how the future economic reports come out to give us further guidance about ever being able to get to 1131, and then hopefully higher. The deterioration is alarming from an economic perspective, but we can all hope things turn around, and allow for strong gains to the up side in the near-term. If not, we will adjust accordingly.

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 21-Day Trial to SwingTradeOnline.com!

© 2010 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.


© 2005-2019 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