The Markets Voted: No Confidence In Obama

Posted on by The INO.com Team

Hello traders everywhere, Adam Hewison here co-founder of MarketClub with your 1 p.m. market update for Friday the 9th of September

It would appear that President Obama's speech last night was not well received looking at the financial markets this morning.

Readers of this report know that we rely on our Trade Triangle technology for trends, and not what a government official has to say and this includes the president of the United States.

I learned over the years that the markets generally tell you what they're going to do. Price action alone is the greatest truth you can see in the marketplace. Price action is what determines trends, price action is what determines traders actions.

Many newbie traders think there must be some mystical power that drives the markets. The truth is, the market is driven by people who believe prices are you going to go higher or go lower. It is that simple, however, most investors tend to over think the market.

Now I understand that there are folks out there that would disagree with that statement and say that the fundamentals, i.e. supply and demand, earnings etc. etc. is what drives the markets. Yes, there is a certain truth to that, but the other part of the equation is the psychology of the market. Market sentiment or psyche can really play havoc on the fundamentals and that is why price action alone is the best market analyst in the world.

As we go into this weekend with the 10th anniversary of 9/11 looming over everyone's head It's important to look at how the markets are closing for the week.

We consider how a market closes for the week to be very important. Did the market make or lose ground for the week? Which way is the monthly Trade Triangles? Did the market close in the direction of the major trend? All of these thoughts are reflected for the most part in the weekly closing price of any market. That's why we concentrate and bring to you our weekend updates, which allows you to see the big picture and not the minutia of every tick.

Now, let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.

 

S&P 500
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 60

As we have illustrated before the pattern in this market is not a positive one. It would appear as of this writing that the S&P 500 index is going to close lower for the week if it closes at current levels. Last week we closed at 1173.97 and currently were trading at 1162.18. The Trade Triangles longer-term are in a negative mode and we have to believe that this market is going to resume its downward trend before to long. Long-term traders should continue to maintain short positions or be out of the market completely, and in a cash position. Intermediate term traders should be on the sidelines waiting for either a buy, or sell signal based on our Trade Triangle technology.

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SILVER (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trend = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 75

Silver appears to be moving sideways and we are still concerned about the sharp downward move on Tuesday of this week. Technically long-term and intermediate term indicators continue to be positive. In the short term we are seeing some weakness basis our daily Trade Triangles. For the week Silver is slightly lower which is contrary to the longer-term positive trend we see. Last week spot Silver closed at 43.20 and currently were trading at 41.90. This has got to be one of the quieter weeks in the silver market. We expect this market will encounter resistance around $43.20 an ounce. Intermediate and longer term traders should maintain long positions in this market with appropriate stops.

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GOLD (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 85

We are still somewhat concerned about the negative engulfing line that took place on Tuesday and was confirmed on Wednesday. These type of Japanese candlesticks are pretty reliable, however they're not 100% reliable. The 3 concerns we have our a possible double top, a negative engulfing line that is being confirmed and also the fact that we were looking for a cyclic high at the end of Q3 or early Q4. For the week the Gold market is trading about $25 lower. Last Friday spot Gold closed at $1882.33 presently we are trading as of this report at $1855.13. It would appear as though Gold is going to lose ground for the week and this is contrary to the longer-term trends. The $1900 level is resistance for gold at the moment. Support comes in around the $1800 area and extends all the way down to $1750. Looking at the market visually it would appear as though we have possibly put in a double top. This will only be confirmed with a close below the $1750 level. Intermediate and long-term traders should maintain long positions with the appropriate money management stops in place.

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CRUDE OIL (OCTOBER)
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 60

The Crude Oil market once again backed off from the $90 a barrel level which we have talked about as being resistance for this market. The Williams % R is setting up for a negative divergence to the downside. Crude Oil reversed itself from the top of its Donchian trading channel yesterday. The monthly Trade Triangle is still negative for this market. We look for Crude Oil to continue to move in a sideways pattern much like it did for most of August. The longer-term monthly Trade Triangle must be given more weight than either the daily or weekly Trade Triangles.

DOLLAR INDEX
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100

Yesterday, the Dollar Index closed over the resistance level we outlined in yesterday's report. That level of 7610 was reached when the market closed at 76.24. Today the Dollar Index is sharply higher and has clearly broken out to the upside. This could be the start of a major move that we have been talking about for the past several days. This index is coming from a large energy field that is capable of carrying it quite a bit higher, possibly up to the 80.00 area. All of our Trade Triangles are in a positive mode and we expect that this market will continue to build strength to go higher from current levels. As we have mentioned before, the monthly Trade Triangles are perhaps the most powerful for setting the longer-term trends.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 70

Our suspicions that this index was not yet ready to move to new high ground were confirmed today with the sharp downward move in this index. Potentially we can see the this index slipping back to the 330 - 325 level before it finds some support. With a score of + 60 we recommend trading this market using the Williams % R indicator, and the Donchian Trading Channels. Our bias is towards inflation in the future, but we will rely on our market proven Trade Triangle technology to point the way when the time is right. Intermediate and short term traders should be out of this market and on the sidelines at the present time.
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As always, we rely on our market proven Trade Triangle technology for catching the big moves.
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This is Adam Hewison for MarketClub, I'll see you tomorrow, right here, same time, have a great trading day.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

22 thoughts on “The Markets Voted: No Confidence In Obama”

  1. We can only hope the Democrats put Country before Party and stop this rampant spending. It's killing this country.

  2. Well, I hate to tell you, but you're wrong. Spending is key to survival anywhere and everywhere. Show me one American family that doesn't cut spending (and can't find a job or revenue from other sources without stealing it) and you'll find they are all out in the street. Companies cut spending because revenues are decreasing and they do not know when, if ever, those revenues will either stabilize or increase. They ride out the storm by cutting spending. Only a lunkhead would think that companies are able to just tell people to go buy their products and services. They have to wait until demand picks up. Demand picks up when people are not so fearful of losing THEIR revenue streams (e.g. jobs) and have enough extra money in their pockets that they feel comfortable spending. This idea that the government has to raise revenues (forcing "customers" to pay more to support their spending) is idiotic and shows a total lack of knowledge about how things work. People like you are enablers of the government. Government needs to cut spending and cut it big. There is a ton of waste and fraud in government (over $ 4 billion in Medicare fraud alone in 2010 was actually located according to AARP). You've got to put more money into everybody's hands. That's the only way. That means cutting taxes.

  3. President Obama's proposal was carefully crafted to both get positive economic results and to have no excuse for rejection based on the expressed economic philosophy of the Congressional majority. That it will fail to pass is a given that was factored into the markets from the day the speech was announced. Investors did not base their Friday market orders on his Thursday night speech. Still, every American (and particularly investors) should hope that the Republicans in Congress will wake up and put "Country before party."

  4. ANYONE who honestly believes this one should have been a 12-18 month process needs to retake Econ 101 if it was ever taken in the first place. This was a HUGE financial problem that NEARLY put us into a depression. On top of that, it centered in our nations MOST important sector...housing. I'm NOT blaming the past admin...as I said earlier...I'm mad as hell at both sides...it took them both to put us where we are today. And where we are today is recovering VERY slowly from the WORST economic setback since 1929 and the many YEARS that followed. The ridiculous spending of the last 10-15 years and the lack of oversight by many during the last 10-15 years has now put our country in a very difficult economic position. To not realize that is just "wishful thinking" and playing pretend.

    Also, I agree with last the post. I got so tired of CNBC that I now watch Bloomberg exclusively. NO CNBC AT ALL. If politics doesn't come to an end on this site it will continue here without me. There are MANY other sites, some that I pay for some that I don't, that tell me about the markets...THE MARKETS!

  5. What you wrote appears true here in the USA as well. Not all but many politicians and bureaucrats push through bailouts and other issues against the people’s will. How can that be changed? The sad reality, as I observe in the USA, is that the majority of its citizens are not engaged in scrutinizing issues of concerns and at best it appears that they are more than happy to swallow all that they get from news, specially via TV and Radio. The large part of the population seems either not being able to find the solution, like me, to enable the elected officials to make action upon evaluating issues academically, intellectually, morally, ethically, and practically with the focus on making the country; thereby, the citizens, to achieve peace and prosperity but lost in their own benefits and interests.

  6. I agree with Dave H. Besides, I think it is silly to relate to the president's speech to have any immediate effects. His job is to give a larger frame of goals that the country should aim at; he is not the one to give details of how what each goal should be worked out and specially in one speech and when the speech is a symbolic one to the Congress and the citizens enlarge. I think it's about time that people in this country, specially politicians and many of the TV commentators, to focus on reactions of all things but dig in further to analyse more academically, scientifically rather than based on one's own bias and preference. Things, real things, require time to develop and mature! Nothing can be instantly had if we are seeking a sound, lasting value.

  7. Generally speaking, I knew Obama was not the savior, before his election. A black president can screw things up as well as a white! My Whitehouse vote was with Hilory. Can you imagine what flavour she'd have bought! Lets get on with the recession so the recovery will be that much closer.

  8. Stocks closed firmly in the red Friday amid fears that Greece may default on its debt and following news that ECB's Juergen Stark will resign. Obama plan is a good one, but Tea Party will block it, so markets cannot go up because every one knows that. I hope people will see the real agenda of the Republicans and the Tea Party : inflicting more damage to the economy to block the reelection of President Obama

  10. I think that Obama has demonstrated very commendable performance with regards to Education, Defense and Foreign Affairs. I don't take his achievements for granted... History may look back on him as having had a very integral role in 'Arab Spring'.... Look at his accomplishments! Done SMARTLY!

    I don't like big government! I don't like the health care bill! I don't like the grip that lobbyists have on our lives! The tea 'parties' have some good ideas... unfortunately they have some bad ones as well.

    Find me one turnaround expert who ever turned around a company without increased revenues. It can't be done by simply cutting spending!... Yes... Cutting is a must... Yes... the tax code and government requires re-structuring... But without new revenues turning the economic future of the USA to one of strength is a fallacy... doing it by cutting alone is a pipe dream....

    I'll give you one more try... bring politics in as part of your agenda and I'm out of here...
    Its your game... do as you wish... I'm just sayin'.
    I commend all of the blogs that I have read.... Some good folks here...So I leave wondering why? Hopefully I will find out.

  11. Adam...

    I'm new here and have only read your last two days of commentary.... You may know something about trading analysis. You may?...However check your politics at the door. Mister Snitch put it best... You contradict yourself!

    The commentary on your blog is all about politics and not about trading..... Do you see where you need to direct your 'focus'?

    I think that Obama has demonstrated very commendable performance with regards to Education, Defense and Foreign Affairs. I don't take his achievements for granted... History may look back on him as having had a very integral role in 'Arab Spring'.... Look at his accomplishments! Done SMARTLY!

    I don't like big government! I don't like the health care bill! I don't like the grip that lobbyists have on our lives! The tea 'parties' have some good ideas... unfortunately they have some bad ones as well.

    Find me one turnaround expert who ever turned around a company without increased revenues. It can't be done by simply cutting spending!... Yes... Cutting is a must... Yes... the tax code and government requires re-structuring... But without new revenues turning the economic future of the USA to one of strength is a fallacy... doing it by cutting alone is a pipe dream....

    I'll give you one more try... bring politics in as part of your agenda and I'm out of here...
    Its your game... do as you wish... I'm just sayin'.
    I commend all of the blogs that I have read.... Some good folks here...So I leave wondering why? Hopefully I will find out.

    Regards...

  12. Guys
    It is all about behavioural psychology, we all think that we are rational but make intuitive decisions! and comments, this is one of those. Mistakes are made by traders including myself by being intuitive because we surmise that is the "edge" we have over others. But what AH is right, price action speaks for itself, presidents and Pm's don't make markets but ruin them. I am trying to overcome and become rational that is the challenge,

    Cheers and have a nice weekend.

  13. This is a ridiculous perspective. Why did the Dow go up 250 pts. on Thurs? We're back in the primary bear market that was interrupted by a 2 1/2 year long bear market rally driven by the Fed. Technicals are diving the market because the trading systems are driven by them. If the Fed had not been supporting the market ever since QEI (and now using S&P 500 futures as well) we would have crashed months ago. This market is still in the Bush Bear market and we're in the Bush Depression.

  14. Stick to your technical trade triangles, Adam. Don't address the why's, you are going against your market philosophy by giving fundamental explanations. BTW, can you say for certain it was the content of Obama's plan, or the rejection of the plan by parties in Congress who would reject any plan by Obama, regardless of the benefits and/or hardships? Or was it Europe again? Most investment pundits are pinpointing European banking problems, but of course you know more than they do...

  15. The politicians may not impact long term markets, but this president has certainly done everything that prolongs what should have been an 8 to 12 month recession. Looks like Japan in the 80's and still copeing with 30 yrs. of recession.

  16. Don't blame Republicans. Dems had control of both houses and did absolutely nothing about jobs. But, they did spend like drunken sailors. And they did push through a lousy piece of legislation with the Affordable Health Care Act. They rammed it through without even knowing what was in it. Why? Because they knew that it was just another giveaway the country couldn't afford and Republicans, if they had the numbers, would have shot it down. They wasted over a year on health care when jobs were supposed to be #1. And now, we've had to listen to the President mouth the word "jobs" for 2 years since health care reform passed and nothing has changed. Not even the spending. And then what? A President starting to campaign in February and criss-crossing the country for THAT (and still mouthing the word "jobs"). Then, when everything was falling apart, chose to go to Martha's Vineyard for vacation. Only an act of God (Irene) brought him back. He's the worst President since Carter. Stop blaming the Republicans. At least, after years of having it screamed at them, the Tea Party now gets that government has to rein in the spending like everybody else has to.

  17. Just what does the market want to hear. I seriously doubt that the market action today had anything much to do with Obama's speech. Why must you inject your political bias into the commentary?

  18. IT WOULD APPEAR WHAT THE MARKET IS ACTUALLY TELLING US THAT IT HAS NO FAITH THAT THE REPUBLICANS WILL DO ANYTHING TO HELP THE ECONOMY. THEY WILL ONLY STAND IN THE WAY.

  19. That's it, right eye wink, wink... Nothing to do with bad news coming out of Europe, it's really a no confidence vote on Obama's jobs speech last night... right eye wink, wink...

  20. Politics is like professional wrestling - liberal vs. conservative and Democrat vs. Republican. It's all for show to keep the masses focused upon fulminating drivel and inhibited red fuming BS.

    Ignore it and focus upon the real movers and shakers - members of the central banking cartel and their corporate brethren who pull the strings for the puppet politicians they buy and own (in both parties).

    I'm surprised how many otherwise very intelligent people don't see this. In Europe, politicians and bureaucrats push through bailouts against the people's will - not to rescue countries, but to rescue their banking friend who hold the countries' bonds.

    This will likely unravel before too long, resulting in high but not hyper-inflation. Hyper-inflation hurts big banks (the value of money and loans approaches zero), so they'll stop the presses before it gets to that.

  21. Adam didn't notice that last night after the speech the S & P's were up 6-7 points. The market fell apart today as more European news came to light. I'm angry with BOTH sides of our aisle but to blame today's market on a speech...silly. I'm holding large positions of only two stocks...AGNC and WHX...and have been for almost a year.

  22. "It would appear that President Obama’s speech last night was not well received looking at the financial markets this morning.
    Readers of this report know that we rely on our Trade Triangle technology for trends, and not what a government official has to say and this includes the president of the United States."

    You keep contradicting yourself in this regard. You say it doesn't matter what he said, then you say that it affected market psychology.

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