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

Challenging S&P 500 1947/Breakout....Sentiment Changes...

Stock-Markets / Stock Markets 2016 Feb 27, 2016 - 07:39 AM GMT

By: Jack_Steiman

Stock-Markets

A very interesting week as the S&P 500 made a strong move upward towards the double top breakout at 1947. It succeeded at getting through. That was as of the close yesterday, so naturally when you get a breakout what you want to see is follow-through, which was the case this morning when we woke up to some very strong futures. The breakout was on with a move to 1962 early on in the day. A nearly 1% move, which can be confirming, but only on a closing basis. When the day was over we saw the S&P 500 pull back, and, thus, it closed only one point above the breakout level, which is not enough to yet confirm that breakout move. Above, but not by enough. So yes, the market has made its strong move off the bottom, but now we get some deeper understanding about what's taking place. About whether this was a rally in a bearish environment, or whether the market is ready for much higher prices. When you study this evening's charts you'll see some very interesting back tests that got stopped today.


It's a very interesting time in this market as the bulls and bears alike are on edge wondering which way this market will swing. It could go either way, but again, study those charts and see where we stalled. A false breakout was possibly the case, but you cannot draw a definitive conclusion at this point in time. We'll need another weekly candle stick to gain that type of necessary insight. For now, our job is to play very carefully, and with extreme patience. It's annoying to wait, but buying only when the oscillators have unwound on the sixty-minute, short-term charts makes sense. Otherwise, your risk reward disappears quickly. Ask those who chased the open today. Not pretty. Not good to buy 70 RSI's, with stochastic's in the 90's on any important time frame. So if we get some pull back next week on solid oscillators, we can buy again, but if we should happen to gap down on Monday, and that gap remains open then things get dicey. Monday is a very important day, with regards to those trend lines you'll see on those weekly charts. Fun and interesting. Stay tuned to a huge week ahead.

Well folks, it never takes long for froth to show itself when the market starts to rise. The fear of missing drives everyone in to equities, with lightning speed. The AAII survey shows bulls are flying higher as they're at levels not seen for many months. The bull-bear spread, once at -14.5% just a few weeks back, will probably be decently above 0% when we get the new numbers next week. Greed, and fear of missing, are two very powerful tools. The bulls are rocking. Now, let's hope they don't get the rug pulled out from underneath them. It may not happen, but they are rocking with force. That can often be the case when you hit strong resistance, such as you're seeing in the charts tonight. They better hope we break above those trend lines or they will be feeling some unnecessary pain. The bears rarely get to enjoy themselves, but they have to feel good about the fact that their numbers are on the decline, while the bulls are rapidly on the increase.

Folks, those who were bearish are losing their momentum on that belief system, thanks to the action over the past few weeks. The market is always fun on that level. It's interesting to see how emotions sway back and forth based on the action over such a small period of time. Bottom line is the bulls are definitely rocking in now. We'll see if they're about to get burned some.

Have a great weekend as we watch S&P 500 1947 for success or failure early on in the week.

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