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

Economic Free Fall....Pessimism Screaming Higher....No Rate Hike Coming Any Time Soon....

Stock-Markets / Stock Markets 2015 Oct 03, 2015 - 11:13 AM GMT

By: Jack_Steiman

Stock-Markets

The market action had been better the last couple of days. Even with a very bad ISM Manufacturing Report number yesterday, the market was able to hang in rather well. Makes sense on some level, since there's that push-pull going on between pessimism and fundamentals. The market had hoped that we'd see a push higher off a solid jobs report this morning pre-market. Wasn't in the cards.


The number was 61K jobs created below expectations. To make matters worse, we also saw heavy downward revisions for the months of July and August. Combined a push lower by 59K jobs. 117K total less jobs created than expected from July through September. The futures were much higher prior to the announcement, but turned sharply lower once the news came out. The free fall was on. The market plunging at the open, and this remained the case for the first thirty minutes, but that was where the selling stopped. Just too many shorts.

Once the SPY lost the gap top the buyers stepped in. Not enough bears to balance it out and off we went well off the lows. Bad news just couldn't get the bears to take away the gap and head towards key support between 1867 and 1860 where we have the uptrend line off the March 2009 lows. A powerful, six-year plus trendline of support. Like the bull market at the top, there just weren't any bulls left to carry us higher. Now we may be running out of bears to carry us appreciably lower. Maybe all the bad news is in. Imagine if the market had a catalyst from unexpected good news! The bears would really be in big-time trouble. Anyway, the bottom line is we saw fear in action today. Too much. When the absolute, worst possible news hit, the market found its short-term bottom at least. You never know in this crazy game.

The bank stocks naturally took the biggest hit early on today, and though they recoveredvery well off the lows, I'd have to think that they are probably, for the most part, an area to avoid. The Fed won't be raising rates any time soon, and the banks love a rising interest rate environment. The Fed is in a real box here. She knows she needs to raise rates, since there's absolutely no inflation, but since the economy is dying a slow death she's afraid to do so. I wouldn't want to be her right now. She's probably losing sleep. Then again, maybe not, or she would have acted sooner. Now the market is predicting a rate hike in March. Yes, I said March. If the economy continues to weaken, it may be March, but maybe not in 2016. Her low-rate scenario is still forcing some dollars into the market, which is why it's down so little off the 2134 highs.

Yes folks, so little. We're only down a bit over 10% on the S&P 500, and that's really nothing when you consider how far up its come and how much bad news the market is dealing with currently. No one would be able to complain if we were down 25%, yet all we're down is 10%, and that's really nothing at all. 10% down, and yet we're at record levels of short interest and have a bull-bear spread at -10%. The bulls will take that every time. So yes, the news out there is really bad. The global economy is in terrible shape, yet the market is barely falling. Maybe in the end my thinking was wrong and we're not in a bear. Time will tell, but, for now, the very worst of things didn't hit the market. Nothing is really safe, and the back and forth is likely to continue, but you can't hate today's action if you're a bull.

In the end, it comes down to that six-and-half-year uptrend line off the March 2009 lows. Only when that gets wiped away will the bears officially have the market where the want it. 1945 is resistance, and if that gets taken out 1987 would be next. Lots of gap downs off the top, so nothing will be easy for anyone. Just the way it is. If it were one or two gaps the job wouldn't be that difficult, but there's five or six gaps lower, and some of them are quite large in nature. So I wouldn't get too happy if I were a bull. Yes, an amazing save today, but the technical damage down was intense, so easy on the happy gas. The market will likely frustrate both sides for some time to come. Get used to it. Best to buy weakness.

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