Jack's Wrap
Nightly technical market analysis by Jack Steiman covering both the session's activity and the near-term market directional trends.
Reversal Again At Support...Should Be Bullish Short Term....
Yesterday we had a strong move down to support. We blew through 1099 and headed to the 50-day exponential moving average at 1093. It actually fell slightly below. We rallied as the day went on, but closed poorly. This allowed for another gap down today that was quite nasty, as we once again, tested the 50-day exponential moving average. This time we went a bit lower than yesterday as we traded to 1089. Getting too close for comfort when you think of how close we got to 1080, or the long term down trend line.
Reversal At Support...Chopping Around...
Nothing is easy with this stock market. Get used to it folks. You're likely looking at months, if not years, of a tough market. It's been tough for a lot of years, and that's likely to continue for quite some time to come simply because the economy in the United States is not in the best of shape. Deflation seems to be the word of the day. Word of the year for that matter, and probably the word you'll hear for years to come.
60's Unwinding...Economy Stinks....
There's a little twist for a title. No matter what these CEO's tell you, the economy has hit the wall. The FOMC Minutes came out today, and they didn't paint a pretty picture at all. It showed how things are slowing down, and that there really isn't too much economic activity, or life, going on out there these past few months. It's scary because this earnings quarter brought about a lot of company's saying things were so good that we're raising guidance.
Quiet Day At Overbought...
When a market gets overbought on the short-term charts or those 60-minute charts, it's important to allow them to unwind out of overbought. The key to that unwinding is how much price erosion takes place. If it's more intense or impulsive in either price, or the oscillators, that would be a small red flag to keep an eye on. However, if the move down is basically done with little price erosion and just your normal oscillator unwinding, then that's far more positive and clearly what we had take place today.
Rally Continues...
It also is putting distance away from 1099 down to 1092, which is very good news for the bulls. They certainly needed some breathing space and they got it for sure as the market churned near this 1100 area today, but eventually, and made sure the bears knew that it would have nothing to do with visiting sub-1100 again. The bears started to cover as the morning went on, and thus it was a day for the bulls.
