Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Stock Market Bad News Bought Again...It's All About Rates....Nothing Else...

Stock-Markets / Stock Markets 2016 May 03, 2016 - 12:41 PM GMT

By: Jack_Steiman


After seven straight down days on the Nasdaq, the market was ready for a bit of a bounce. The Nasdaq has been underperforming, mostly due to Apple Inc. (AAPL), which has been sinking like a stone since they had their earnings report and Carl Ichan sold all of his shares. Many other Nasdaq stocks have participated in the bad earnings world as well, which has clearly contributed to the down turn in the Nasdaq versus the rest of the stock market. The S&P 500 is holding up far better than the Nasdaq as the big money continues to rotate into safety and away from froth, and higher P/E and beta stocks. Risk is not what they're after at this moment in time. Safety is the name of their game.

So they moved up a drop at the open, and then quickly turned red on the Nasdaq, before the market started moving higher again, and holding higher for the day. The bulls needed this today as the market was getting closer to the key level of support at 2040. More on that later. The bulls don't want to play with fire, meaning allowing this market to close within shouting distance of 2040, because it would only take one piece of the wrong news to turn the market more bearish, which is what happens if we do lose 2040 on a closing basis, especially with a little force behind it. The bulls needed this type of day, and fortunately the market cooperated. They're not out of the woods, yet, as all we are in is a trading range for the moment, but at least the bulls did what they normally do, and that's get the market to move up when it really needs a positive day of price action.

The catalyst for a decent day came at 10 AM ET today when the ISM Manufacturing Report came out and showed things are worsening once again. The report was supposed to come in at 51.5, but sadly came in at 50.8. Our economy continues to struggle mightily, but sadly the market loves bad news. The reason you all should know by now is that when things are awful the rate hike cycle gets pushed back further and further. That's all this market cares about. Push it back as long as possible. If you give folks an alternative to leave the market they will, but if you leave rates near zero, and let it be known that no cycle of rate hikes are on the way, then folks will be forced to remain in the market.

That perception, real or not, is allowing the market to hang in there when quite bluntly it has no right. The economy is weakening with earnings poorer than expected. This deadly combination would usually lead to a strong bear market, but not now. Not with the fed promising low rates for the foreseeable future. Again, that's all the market cares about. Markets only focus on earnings if necessary. If you give it a reason not to it will trend higher. The fed has given the excuse to turn away from the truth, and, thus, the market is behaving against the grain of truth as I have ever seen. Bulls don't mind. We all will one day in a way we won't want to, but hey, kick the can down the road. We'll deal with the truth later on.

For the time being there's really only two important levels to focus on for the big-picture stock market. S&P 500 2040 is where the fifty-day, exponential moving average lives, and 2116 is where we have the old highs. 2040 is so important, because with the Nasdaq already lagging and losing the 50's, you don't want to see the strongest area of the market lose it as well. That type of market weakness would send a message to the bears that they've taken control of things. It would be a change of trend technically that we should not see if things are really going to break out in the near- to medium-term, so again, watching S&P 500 2040 is really all we care about in terms of a trend change. All action above 2040 and below 2116 is merely noise, and maybe the market is simply trying to unwind elevated oscillators before trying higher once again with some force.

We are beginning to unwind some, but we have a lot to watch and should try to be very careful short-term not to over play. Take things slow, for now. No need to be over involved.



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

6 Critical Money Making Rules