Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street


The US stock market was closed Monday for Washington’s Birthday, aka President’s Day

The rest of the world sans China was open, we will know early how they fared and what to look for at the Bell in the US.

On the Fibo retrace North across the board, I look for a test of the last resistances turned support and if they hold a move back toward the January highs.

Historically when a market peaks and reverses as violently as stocks did 3 odd weeks ago, they rebound over the course of a few weeks, then move down to test a prior low.

Many times that test goes lower and  shakes out the weaker participants that got in late, bought too high, and have lost their penchant for pain.

And once they are gone, the participants that are left are the stronger, loaded with cash, and they use shakeout to start buying, and a new rally happens.

We call that the fear and greed combo works time and again.

When stocks are getting hammered redemption requests are surging, and margin calls are draining the accounts.

And even seasoned traders and managers succumb to emotions. Their algos read the headlines and sell, then the managers take over after the initial selling, but then someone panics again and the Southside resumes, the weak head for the windows.

These patterns play out again and again, regardless of the technology and the confidence that things are this time.

The Street is full of bluster

On days when the market is strong, they are broadcasting buy everything

On down days the same peeps are almost suicidal, saying the market is just fickle now, that selling will resume and they always ask the Big Q: How low will it go?

This shows the kind of emotion that plays in the market and makes people make emotional decisions, just what you never want to do, ever.

It is Key to remind yourself that patience rewards, and rewards particularly in a fast volatile market, and that gives you control over the emotions that bring on dumb moves.

To contain emotions means being prepared, have a plan and plays ready for the scenarios the market gives you.

Stick to the plan, the plan empowering, the plan makes money and does a good job avoiding the loss of money.

Remember, always take what the market, gives, plan your work, work your plan, and since it is your money it is your responsibility.


The Bulls Vs The Bears


Sentiment Indicators

VIX: 19.46; +0.33
VXN: 20.46; -0.39
VXO: 17.38; +0.12

Put/Call Ratio (PCR) CBOE: 0.93; +0.01. Elevated all last week as the market rallied.

The Bulls Vs Bears

Bulls off 2.5 last week.

Bears faded a bit.

The Bulls are at 51.9 Vs 54.4 last

The Bears are at 14.4 Vs 15.5 last


Support and Resistance

DJIA close: 25,219.38

25,391 the 61% Fibo retracement
25,521 from Feb 2018
26,000 from Jan 2018
26,439 from Jan 2018 high
26,617 Jan 2018 all-time high

The 50-Day EMA: 24,989
24,835 from Dec 2017
23,608 the Nov 2017 high
23,602 from Nov 2017
23,360 from Feb 2018
The 200 day SMA at 22,893


S&P 500 close: 2732.22

2744 the 61% Fibo retracement
2751 from Jan 2018
2762 from Feb 2018
2808 from Jan 2018
2850 from Jan 2018
2873 the Jan 2018 high

The 50 Day EMA: 2710
2694 a Dec 2017 high
2597 the Nov 2017 high
2584 the upper channel line from the 9 March 2009 uptrend marker
The 200-Day SMA: 2547


NAS Comp close: 7239.47

7240 from Feb 2018
7300 from Jan 2018
7317 the 78% Fibo retracement                                                                                                                            7506 the Jan 2018 all-time high

The 50-Day EMA: 7090
6918 from Nov 2017
6914 from Nov 2017
6796 from Nov 2017
6641 the Oct 2017 high
6630 the Feb 2018 low
The 200-Day SMA: 6583

Have a terrific week.

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