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
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

A Week Where Pessimism Ruled.... Stock Markets Rally....

Stock-Markets / Stock Markets 2015 Oct 10, 2015 - 12:53 PM GMT

By: Jack_Steiman

Stock-Markets

Pessimism has been rocking in over the past two months. Step by step we've seen more and more bears come in, while more and more bulls run out. Shorting positions dramatically on the rise. Fewer and fewer people are talking as if the market can actually go up again. So naturally the market had a nice week to the upside, closing at overbought on the short-term charts for good measure. Shows how much pessimism and short interest can do for the short-term, if not a bit longer than that. The bull-bear spread started the week at minus 4%. It was probably close to zero or slightly green, but still a solid number for the bulls.


Short interest is still sky high, meaning the right does of good, unexpected news could cause somewhat of a short-term melt up, but we just don't know if that's out there. We shall see, but in the meantime, the bulls have a friend in pessimism, and a needed friend at that, since the fundamental news is horrific at best in most cases. The bears need it to stay that way or they'll feel some real pain. In the end, it was a good week for the bulls, but not one where they can say they've taken over control, because they've yet to gain that final moving average above or the 200-day exponential moving average. I'll talk about the significance of that in a moment. The bulls can breathe a bit easier for now.

In the end it's always about removing a level of resistance that separates one trend from another. In this case, it would be taking out the 200-day exponential moving averages across the board, but we'll focus on the S&P 500 for now, since it tested there today. 2030 on the S&P 500 is the number, and, of course, you need a decent close, not just a close over by a point or two. It tried today, but overbought short-term sixty-minute charts put a halt to making it through. A small pullback may be needed first, but over time it's about taking out 2031 with force.

If that occurs, the bears know they're in big trouble. Then add in very high, short interest, and it wouldn't take much to get back close to 2100 again. The bears know the implication, thus, expect a war there. They'll throw what they can, but it may be that they're mostly, if not completely, all in, and won't be able to stop the momentum. We shall see as there are no guarantees, of course. The bulls have taken this market up to the key level, but getting close has no meaning. Success is all that matters. Below 2030 the bears have no problems and they know it. Should be an interesting war over the next many days or weeks.

There's not much else to add, other than what was already mentioned. That's something we'll have to deal with in time, but I think not now. The long-term monthly charts are beyond bad. Any new high over time will create the mother load of all negative divergences, and that will likely equate with the end of the bull market, but, again, hopefully, that's a bit down the road, and maybe we can see equal or higher highs at, or above, S&P 500 2134 first. If, and when, that occurs, I'll be looking for the topping stick that says the party has ended for a year or so.

In the meantime, I think we can get higher. Maybe even new highs higher. A day at a time.

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!

© 2015 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