Broad Stock Market Index At "Must Hold" Level
The NYSE Composite’s bull market is on very thin ice.
Wow, what a first week of the year in the markets. At least for the bears, that is. It’s looking like potentially the worst first week in U.S. stock market history, in fact. We’ll try to check into that and hopefully get a post up about where it ranks and what the potential ramifications are based on historical near precedents. We can tell you that there are potentially severe longer-term ramifications based on specific developments that took place within the markets this week. First and foremost were price breakdowns among key indices which we highlighted on Wednesday.
And while those breakdowns on Wednesday, in our view, represented the most significant developments of the week, not all major indices have broken corresponding levels. There are others that are close – very close. One such index of major broad market consequence is the NYSE Composite (NYSE). The NYSE is currently on very thin ice in terms of holding a major support level. In fact, the ice may be cracking as we speak.
The level we speak of on the NYSE, around 9600, represents a cluster of Fibonacci Retracement lines from the 3 most critical junctures since the 2009 low. We have mentioned often that the closer that key levels match up with each other, the more potential significance there is to the level. At least, it increases our confidence that the level is indeed valid and relevant.
In this case, the specific levels near 9600 are:
- The 23.6% Fibonacci Retracement of the 2009-2015 rally
- The 38.2% Fibonacci Retracement of the 2011-2015 rally, and
- The 61.8% Fibonacci Retracement of the rally from the early 2013 breakout level to the 2015 high
As of today, January 8, the NYSE closed at 9528.77, so it is indeed on thin ice, if not slipping into the frigid waters. While a level of this longer-term magnitude should be given some rope in terms of temporarily overshooting a level, we wouldn’t give it too much rope.
What are the ramifications of losing this level? First off, it opens up the next major downside level around 8575, which is another 10% of risk from here. Additionally, it would set a lower low on the chart. The NYSE has already established a lower high, so this would suggest a downtrend is in the works (and, potentially a bear market).
So what do we think will transpire here? Well, there is no way of knowing and no reason to forecast. As always, follow prices and let them tell you what is happening. While this level represents pretty convincing support, one bad thing for bears is that the NYSE already tested the area, in the August-September bottoming process. Therefore, the level has been softened up a bit already, as we say. That is, the level is less likely to be as strong of support as it was the first time.
Thus, if we had to guess, we would not be surprised to see the level hold again, temporarily, producing a smaller bounce than the post-September version before eventually failing as other indices are doing. But that is just speculation, so don’t “hold” us to it.
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More from Dana Lyons, JLFMI and My401kPro.
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Break the fucking ice already.
Don't sell until you see the panic in their eyes.
Isn't that when you are supposed to buy?
That is when the Exchange Stabilization Committee is supposed to buy.
Asia is in the tank right now and European futures don't look promising, so US markets are setting up to open lower... The blood letting shall continue and let this bitch burn... Som nom na...
That is when retail sells and smart money buys.
The smart money is short and has been for months. Or at least collecting gold and silver bullion.
The smart money covered and sold into the Friday morning rally. They are going to sucker everyone this week with a "don't worry be happy" rally and then Kablooey.
GS, BAC, MS reports and I think what they say will tank the markets below the August lows.
Time to dust off the "Dow 10,000" hat again?
I've been short equities and long metals just waiting for this setup, as I would expect from most ZH members...
Does any of this technical analysis mean anything anymore? Seems to me the markets have turned into a convenient political tool.
Does any of this technical analysis mean anything anymore? Seems to me the markets have turned into a convenient political tool.
But if you wait until after they do (the insiders)... you better know what they're buying, cause the bug eyed sellers could be selling a crock of shit. Then again, the HFT's will make certain of it. In the wise words of William Banzai 7...
I could really give a FF as to whether "the market" holds or not...
Must hold level? After a 2015 that was flat and high in volatility? And the Fed said they would raise rates but haven't - nor can they. This isn't a must hold level. This is hope that there isn't the greatest market collapse ever level.
Indeed. We need moar DOOM...
I wonder.......when markets worldwide flush down the drain.......will the NYSE hold up ?? Personally......guess Not !
It will be the drano of the flush.
If the NYSE ever fails it'll be because the Kosher-Nostra pull the plug and short the bastard all the way to the basement,other than that it'll hold up to anything via manipulation and malfeasance even fire and brimstone.
sell it all..... suckers...
Really!?? I am not sure this kind of analysis is anything more than the usual 'chartology' peddled by shamans that claim to be able to predict the future.
If they could do that they wouldnt need to do any analysis, they could just take over the world.
They only repeat the trends and can't predict. They're to dumb for that.
So you should only see it as a confirmation that the bear bet was the right one.
My puts are up 370% last week :) They where just so fucking cheap in december!!
It's like nobody was buying puts!
Way to go!
If the market goes down only 5% this week, it will be a good week.
Earning reports are comming due and they aren't pretty.
Right now, the market is way oversold. I doubt we get another 5% down this week. Probably back and forth ending about even. The following week maybe.
I dunno. I expect some kind of "miracle" rally towards the end of the week. I think we will end it slightly positive. Not betting any money on that, just a hunch.
I'm fighting back an enormous erection at this point...
That in millimeters ?
your own?
<<< sell the rip
<<< buy the dip
Mixed message here - as usual from pundits. "Oh, bulls are on thin ice." "Oh, this level will hold and go up".
Why do you always have to have it both ways? So you can claim you were right later?
Well if it holds, Zombieconomy lives on, and Bernanke has as another chance to die before he is hanged.
All logic, fundamentals, and technical analysis show the markets going down - but then again, this is NOT a free market!
Snap. Crackle. Pop.
With all the plunge protection going on it is no longer private investors owning shares of corporations but central banks, governments and pension funds et al.
If this thing sinks, taxes will go through the roof as our civil servants have been gambling with our coin.
Since nothing was solved since 2009, isn't it a given that we revisit 2009?
Fibonacci that, wankers!
4100 here we come...
We don't have to revisit. It's still 2009.
Well there's some people got some levels and some people got other levels. Mine busted Thursday, then really busted Friday. Eek...
http://tos.mx/23rk0B
"Hold in a second, Jim. Maybe he's still... Nope..."
https://www.youtube.com/watch?v=3at_Ev2kOoI
They have been on CBS etc all weekend telling folks to stay for the long haul and not panic. Might as well to late to panic
CBS, huh? We always got the truth and straight story from that outfit. Yeah. Really truthful, trustworthy, candid, frank, on the up and up, and so forth. Can't go wrong with CBS. LMAO.
Spock to captain Kirk..."tricorder readings are detecting signs of financial chicanery on this planet captain".
Kirk...."The prime directive says we can't interfere with these primative cultures Spock".
Spock..."What do you propose captain?"
Kirk...."Checkoff....Prepare to fire all phasors and photon torpedos at the planet surface!"
Spock..."Captain?"
Kirk..."This planet isn't worth the hastle Spock"...."FIRE!!!"
Borg fleet commander to Borg planet: "Still hold Earth firmly. See nothing to worry about. Advise continue to more important planets."