Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Reverse REPO Market Brewing Financial Crisis Black Swan Danger - 29th Jul 21
Next Time You See "4 Times as Many Stock Market Bulls as There Are Bears," Remember This - 29th Jul 21
USDX: More Sideways Trading Ahead? - 29th Jul 21
WEALTH INEQUALITY WASN'T BY HAPPENSTANCE! - 29th Jul 21
Waiting On Silver - 29th Jul 21
Showdown: Paper vs. Physical Markets - 29th Jul 21
New set of Priorities needed for Unstoppable Global Warming - 29th Jul 21
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Benefit of the Doubt Must Go to the Stock Market Bulls

Stock-Markets / Stock Markets 2010 Mar 02, 2010 - 05:15 AM GMT

By: Steven_Vincent

Stock-Markets

Best Financial Markets Analysis ArticleA quick look at a chart of the SPX shows that price has essentially gone nowhere since October.  Essentially there is no trend at this time and there hasn't been since October.   Another leg down from a lower high would create a 6.5 month head and shoulders topping pattern.



Today equities have broken out strongly through shorter term resistance. BullBear traders have been long from the swing bottom near February 5th.  We are going to maintain our long positions and give the benefit of the doubt to the bulls.  Taking some profits as price enters the described resistance zone in the 1126 area is advisable, but we may want to hold at least half of the position as SPX appears to have forged an intermediate term reverse head and shoulders pattern which projects to 1170 (distance from neckline to head is 65 points added to neckline break).


The price close and 14 day MA of the Put/Call ratio is consolidating at its highs and the close is making a series of higher lows even as the market has rallied.  The persistence of fear in the market may make a top elusive until the 14 MA comes down to .80 or lower.


Gold is still consolidating but holding up well. Even during a sharp rally in the dollar today, gold did little worse than consolidate. It also appears to be creating a reverse head and shoulders formation. A run to the neckline to complete the head as indicated in the chart would be the next stage. Then a pullback followed by a rally would form the right shoulder.  A similar (much larger) pattern launched the most recent bull run from August to December.


The Euro appears to be undergoing a fairly extensive and complicated bottoming process which could produce a more significant rally than otherwise thought. On the other hand, we cannot discount the possibility that this formation is actually a continuation pattern. A
bull move in Euro would likely power equities to complete the reverse head and shoulders pattern as well as a strong move in gold. The fundamental backdrop appears set up for some kind of news event which gives hope to the market that the European debt crisis is blowing over (unlikely). Today's word was that Great Britain is the new Greece.

The setup appears to be for a rally to a double top or new highs in most markets as the dollar sells off and the Euro rallies.  Once the reality of the European sovereign debt debacle reasserts itself, selling may be renewed.  This is a process that may take several months.  There appears to be significant potential for the US Equities, the US Dollar, US Treasuries and Gold to all act as short to intermediate term safe havens during a period of European instability.

The US long bond looks like it wants to breakout in a setup which evokes the market prior to its 2008 panic run.


It's interesting that the Swiss Market Index has broken strongly to new highs.  If a major debt implosion is hitting Europe it would seem unlikely that the stock market of the continent's banking center would be performing so well.  Perhaps there is a message here.

For a more detailed analysis of the equities, commodities, precious metals and forex markets watch the BullBear Weekend Update.  Here's the first of 10 segments of a 110 minute report:

To watch the full report register to enjoy a one month free trial of BullBear Trading Service:

http://www.thebullbear.com/group/bullbeartradingservice

Good Trading!

Disclosure: No current positions.

By Steve Vincent

http://www.thebullbear.com

The BullBear is the social network for market traders and investors.  Here you will find a wide range of tools to discuss, debate, blog, post, chat and otherwise communicate with others who share your interest in the markets.

© 2010 Copyright Steven Vincent - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Carl
03 Mar 10, 09:48
Bullish ?

You say - BullBear traders have been long from the swing bottom near February 5th. We are going to maintain our long positions and give the benefit of the doubt to the bulls.

But on 7th Feb you said you were bearish ?

http://www.marketoracle.co.uk/Article17072.html

Steven Vincent has been bullish since March but has turned bearish on the intermediate term and is ready to turn on the long term as well. Larry Katz has been long term bullish since March but has turned bearish on the intermediate term while remaining firmly long term bullish. Andrew Cardwell has been neutral to bearish since March but has once again turned firmly bearish. The panel agreed that a short term bounce is likely and that the intraday reversal on Friday was the beginning of a bounce. All regard this bounce as a shorting opportunity.

So how exactly did you go long on the 5th when you were bearish on the 7th ?


Steven Vincent
05 Mar 10, 00:35
Bullish?

Please actually watch and listen to the referenced video. In it all 3 of us conclude that a bounce was imminent and we turned bullish for a trade. As the trade developed I concluded that the scenario had changed and that there would be continued upside and so we have stayed long. When I think that conditions have changed we will move back to the short side. Please watch the video.


Post Comment

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