Jack Steiman is author of SwingTradeOnline (www.swingtradeonline.com), a live interactive blog focusing on big-cap stock picks and market timing. Jack is a former columnist for TheStreet.com who is renowned for calling major shifts in the market. President of New York-based Visionary Research Group, Jack consults to individuals and companies on stock market analysis and education. He honed his skills as a trading educator in front of live seminar audiences in his role as chief financial strategist for InvestEd Central, and also previously hosted two daily programs, "Market Close Live with Jack Steiman" and "InvestEd Central with Jack Steiman," on Business Talk National Radio. Jack's best-known market calls include the bottom of the bear in mid-2002, the market top in October 2007, and the market bottom in March 2009. Using technical analysis, Jack's strategy is to analyze the likelihood of a stock or index breaking out of -- or down from -- a wedge pattern. One particular tool is MACD, a measurement of buying/selling intensity, which Jack uses to identify divergences from price -- with low selling intensity a positive divergence (bullish) on a downmove and high selling intensity a negative divergence (bearish) on an upmove.
A Drop Of Selling....... May 20, 2013
For now that's all it is, but the question is will it become more or will it be just another drop of selling that gets bought up by the bulls. The answer to that will be answered to some degree early tomorrow. We will watch those futures overnight and they should give us some insight as to whether we're getting follow-through or not. The bears need to get rocking with some momentum now. The longer they wait to hit the market the faster the bulls react to buying any weakness.
Poor Data...Nothing Stopping The Bull.... May 17, 2013
Poor data, again, late in the week couldn't get the market to stumble very much. Some, yes, but in a big way, no. We saw the number from the Philadelphia Fed come in below the zero level again after going green the prior month. Minus five, and change, showing their economy is in recession for the very short-term at least. On top of that, we then saw a huge increase in the jobless claims number. Thirty thousand bump up and well above expectations.
Stable..... May 15, 2013
Stable is the best word I can find to use for today's action. The bulls tried a few times to run away with things while the bears made a few attempts of their own. Back and forth they went. In the end, the bulls held their own when you consider how overbought we are. We seem to be staying overbought, and thus, the bears have yet to take advantage. You have to wonder when they will, but for now, they have been unable to get any sustainable down side action going.
Not Much To Add.....Bull Very Much Alive..... May 13, 2013
I can go on and on for hours and I wouldn't be able to add anything from my report over the weekend. Today was a flat day overall but the bulls will take it since last night it looked as if the market was about to take a good old fashioned beating. Futures were rocking down on absolutely no news. So why the selling? No reason necessary other than markets don't go straight up and we were also near overbought on the daily charts while being overbought on the weekly charts.
Bull Hanging Tough..... May 10, 2013
What's really left to say that I haven't said for quite some time now. Yes, the market has been ragged at times with many head fakes and whipsaw action, but the bulls have hung very tough, not allowing the bears to seize on things for very long. Every time it seems the bears have made some real progress, the bulls come in unexpectedly and turn things around in a hurry, not allowing the bears to feel they're gaining any confidence. The bulls have squashed all attempts and continue to do so.
Still Above 1597.... May 8, 2013
Another day has gone by and yet another day with the S&P 500 holding above the breakout at 1597. Each day the market hangs above 1597 is bullish from this perspective. The bears will give up over time if they can't remove the big breakout level. They will need to take it way sooner than later of another leg up will take shape over time. We opened flat today but all attempts at selling with any force were quickly bought up by the bulls.
Lateral...Breakout Holding..... May 6, 2013
An ideal day for the bulls on this Monday would be exactly what took place. A nice quiet day after the breakout over 1597 on the S&P 500. Less volatility is more for the bulls as the bears could not muster up any energy to try and remove what the bulls just captured. It's very important to follow the market action for a few days, in particular, early on after a breakout or breakdown to see if that trend can hold up.
The masses thought it couldn't happen. That is, wouldn't happen. How can we make an important breakout when you see all these poor-economic reports? Also, it's normal for a market to double or triple top and then crater back down, isn't it? There was a lot of big money that was against the Jobs Report this morning. Many were thinking the number could actually come in negative.
Not A Pretty Economy...... May 1, 2013
The disconnect I've been speaking of has gotten worse in the recent weeks. There are a plethora of reports that seem to be headed the wrong way. We're seeing jobs weaken. We're seeing claims strengthen overall. We're noticing some states reporting recession-type numbers on manufacturing. We saw the United States as a whole barely hold above the recession line today when the ISM Manufacturing Report came in thirty minutes in to the trading day.
Did we top out today? We basically made a double top at 1597 with a print of 1596 today. That's a double top if ever I saw one. It would be a natural thought to think that it's all over now for the market. It's possible that it was a double top and down we go from here, or we could just as easily hang in there quite well ahead of that massively important ISM Manufacturing Report headed this was early Wednesday, just thirty minutes into the trading day.
Comeback Week...Still Below Recent Highs..... April 26, 2013
The bull market fought back this week, although it was unable to get back to the highs, especially that 1597 high on the S&P 500 that many are talking about. It did grind its way up to 1590 during the day Thursday, but has fallen back since. The market will be waiting to see if the bulls can make yet another run early next week at that old high reading, but for now we saw a retrace of the move down. No success yet for the bulls but clearly nothing bearish.
Bad Earnings...Terrible Durable Goods....Yawn...... April 24, 2013
Strong like a bull is an expression we often hear when things just don't seem to do poorly. It doesn't usually pertain to the stock market when that expression is used, but it could be used now. Why? Well let's take a look at some of the events over the past day, or so, that could have led the market down the path of strong selling. We had just overall horrific earnings reports last night and this morning from many major market leaders.
Small Rally....Nasdaq Leads...MSFT/AAPL Strong... April 22, 2013
The market isn't going into a bear state of being. Many believe it is, but I, for one, do not believe that simply because the Fed has told us so. Yes, you can laugh, but as long as the liquidity machine is rocking, so will the market, even though there will be periods where the market goes lower. It can be nasty at times, as well, but that does not mean things are moving from one type of market environment into another. The pullback we have been experiencing probably isn't over, although you never know.
This was a week for the bears. They were able to take all of the key index charts and bring them down with a little bit of force. The indexes were down roughly 2.5% on average, somewhere between 2% and 3.5% depending on where you look. The market had grinded for many weeks and then a few days came with some decent selling which basically took out the gains from those previous weeks. When market fall they usually fall pretty fast and can remove many weeks of prior gains in a very short time span.
Follow Through Wednesday.... April 17, 2013
When a particular side is taking control of the short-term, you want to see certain behavior take place to confirm the trend is what it appears to be. You want to see technical action occur that solidifies the action. The market had a huge gap down last week. It needed a follow through gap down this week and got it on Monday. That's not the follow through I'm talking about however.
Gold...Silver....Bursting Bubbles......Lead Market Lower.... April 15, 2013
Yes, the selling was across the board today, but the most interesting part of today was watching the continued bursting of the commodity bubbles in gold and silver, along with other areas of the commodity worst. Gold and silver and other commodities have never been anything more than pure froth or a bubble, no different than the bubble that existed in 1998-1999 in the world of technology. What you learn through age is that ALL bubbles burst in time and never come back.
A Little Selling.... Commodities Crushed.....Again.... April 12, 2013
If you want to try to understand on a deeper level what it means to have a disconnect just look at the behavior of the commodity stocks. If the world was really in good shape, and we had real growth everywhere, then these stocks would be on fire to the upside. They are acting as if there's major deflation going on. And in the real world we do have deflation. Mr. Bernanke’s liquidity supply is keeping the market up, but that's not the real world folks.
Why Not......New Highs On The S&P and Dow...... April 10, 2013
The market makes very little sense, even when it does make sense. For most folks, things seem really out of line here because of the major disconnect between the real economy and the price of the stock market. Folks should be confused. There is no reality to anything happening in the stock market, but there I go being real again. The way to play the market is not through reality but what's the real driver behind price. It's pure inflation created by Mr. Bernanke.
From Hollow To Green..... April 8, 2013
Friday was the big opportunity the bears had been waiting for, really nasty employment data to go along with a huge gap down. There it was. All for the taking. Seize the day you bears! No dice. They seized nothing. They let it get away. They had their knee on the throats of those bulls but let them up again. Give the bears credit though. They tried again today. The futures were up nice early but gave way as the morning wore on pre market.
The bears finally got the news they so sorely needed. The market wasn't ready for another disappointment regarding economic slowing, but the number on the Jobs Report was quite poor. 88,000 jobs created instead of the 200,000 that was expected. The futures weren't very happy in front of the report and certainly wasn't happy after it. The futures fell hard allowing for a large gap down open.
Down For A Day... April 3, 2013
The market has needed a correction to begin for quite some time now. The market may have finally begun to sell some as today's action was fairly bearish overall. The market started out mostly flat, but started to sell as the day went along led by the commodity, bank and semiconductor stocks, the semiconductor and bank stocks losing their 50-day exponential moving averages today. This had to happen at some point folks.
Poor ISM...Poor Advance Decline Line...... April 1, 2013
The market, as usual, refused to fall overnight no matter what else was going around the world. Our futures are refusing to follow others down. Ours is the market that just won't fall. The market opened flat and started moving higher as always until it ran into a real road block. The ISM Manufacturing Report came out and the number was just terrible. 51.2. 50.0 is the line between growth and recession for our economy. Think about this folks. Mr. Bernanke has implemented incredible liquidity.
Gap Down…Bulls Fight Back...... March 27, 2013
Once again it looked like the evil pullback was under way. The futures were bad and worsening by the minute as European stock markets were diving. Flat futures became nearly one hundred down on the Dow and roughly twenty-five on the Nasdaq, Ten was the handle on the S&P 500. The market gapped down hard but refused to get worse than the opening print. It spun around in a very tight range the first hour or so and then slowly but surely started to improve.
Some Selling...Losing More Stocks.... March 25, 2013
We saw a bit of selling today. Nothing from nothing, but at least a bit of selling off the top. The key was the reversal off the large, early-morning futures, which were up quite a bit thanks to the latest bail out of a country that did things poorly. Hey, can't let bad behavior have consequences now can we! The Dow futures were up nearly one hundred points when figuring in fair value this morning on the news.
Market Bends....Doesn't Break..... March 22, 2013
The market looked to finally start a sell-off on Thursday as there was a strong gap down after Mr. Bernanke spoke on Wednesday. The gap was the real deal as many leading stocks broke down below their 50-day exponential moving averages and did so on confirming volume. Finally, said the bears. Something we can dig our teeth into. The bears were feeling as if they finally had the bulls on their knees. A sustainable pullback was imminent. Or so they thought.
Fed Keeps It Going..... March 20, 2013
The market was waiting on Mr. Bernanke today to make sure that the status quo was with us for a long time to come. The market was not in the mood to hear anything related to van imminent rate-hike cycle or the removal of the liquidity machine he has had on for what seems like forever. He did not disappoint as he kept things the same and said he would be holding things as they are for a very long time to come as the unemployment rate is still far too high at 7.7%.
Greece Gives A Little Excuse To Sell.... March 18, 2013
So we finally got some news that would help the market take a deeper plunge. Well, not exactly a deep plunge, but the early futures last night suggested we may see some blood on the streets today, the futures down 140 points on the Dow, nearly 40 on the Nasdaq, and 20 on the S&P 500. We had the makings of something to help us really unwind those overbought oscillators on the daily, weekly, and monthly index charts.
Moving Right Along....Weekly Charts Strong..... March 15, 2013
I know it must seem impossible to many of you. In fact, it must seem impossible to the masses. But there is nothing bearish on those weekly candle sticks other than overbought, and we all know by now that overbought unto itself is not a sell signal. It tells us to be extremely careful, but overbought is not the same as distribution volume at tops. It's not the same as good news being sold, and it's not the same as nasty negative divergences. It's just overbought.
Tiny Sticks...No Topping Sticks......Yet! March 13, 2013
There's a big difference between tiny sticks up or down and those nasty reversal sticks we can see at tops. Now, it is true that quite often these tiny sticks are a prelude to something bad coming soon, but as always, never front run it. Wait for the reversal to happen and then go for it. Too many have gotten slaughtered front running this market to the down side the past many weeks of overbought conditions. Nothing more dangerous than playing what you think should happen versus actually seeing the reversal occur.
Stable...... March 11, 2013
It’s hard to believe it's stable, but that's what the market is doing, and showing the ability, for now, to fight through all the negatives that abound for owning stocks short-term. The strong negative divergences alone are reason enough to pull this market down hard. Add in overbought daily, weekly, and almost monthly charts and the bears have little to no excuses left. These types of set-ups often cause market turmoil that allows fear to shoot up in a big way. Instead, the VIX is falling to new lows.