Jack's Wrap
Nightly technical market analysis by Jack Steiman covering both the session's activity and the near-term market directional trends.
More Than Interesting...Breaking Out
If we look at the daily charts, or the weekly charts, or, for that matter, the monthly charts, then we can see we're on breakout. It's not gangbusters, but it's a breakout, and it happened into very overbought conditions, which speaks to the strength of this stock market. It all took place after we received the made-up employment numbers from our Government. Nearly twice as many jobs created than was expected.
Good Battle At S&P 1325...
The bulls are trying, but so are the bears. The bulls are doing their very best to move the market through S&P 500 1325. The bears are drawing the line in the sand with one intense fight. They are telling the bulls that, although things are moving upward, getting through 1325 will require a lot of work. There have been two attempts now to get through 1325, but both times we've had churn, not a run through, and beyond. That's the bears doing everything humanly possible to hold things down.
A Necessary, Healthy Pause.....
There comes a time when it's best for everyone who is bullish to step back and take it easy for a while. It’s never great to have markets only going in one direction, even if the move is on small candlesticks. It's best to let the momentum that built up too fast take a breather. If you keep moving higher into overbought daily index charts, at some point you get a very nasty and unwelcome snap down.
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Some Selling Off Overbought....
Nothing terrible, and it may not be too much more, although more would be a good thing for this market so as to unwind things more deeply on the daily charts. When markets start behaving more bullish, it doesn't just fall apart from overbought. It's a slow process to unwind things back down some. Bulls look to buy up any weakness, and bears who are stuck short, look to buy back those short plays on any weakness.
