FullyInformed.com

Market Direction Falls Below 1300 Leaving Next Support at 1275

Jun 1, 2012 | Stock Market Outlook

Despite last night’s rate of change prediction of a possible change, this morning’s poor employment numbers mixed with continuing talk of Greece, Italy, Spain and now even Germany who analysts say may be considering leaving Euro is obviously too much for the market to handle. The market timing technical indicators from last night, in particular the Ultimate Oscillator, Slow Stochastic and Fast Stochastic were correct when they indicated market direction down.If the unemployment picture had improved then it may have been a different picture this morning and perhaps that is what the rate of change was reflecting upon.

The quick break this morning of the 1300 level in the S&P 500 and the fact that it has been retested several times moves support levels lower. The 1300 level in the S&P 500 now becomes resistance. Obviously this year the Sell in May theory should have been Sell In April.

Market Direction Support Levels S&P 500

Next reasonably strong support level is around 1275 which was the October and November 2011 highs.

After that there should be support at 1250 which was the December 2011 highs. The third level of support would be 1200. You can see these in the chart below. 1200 would mark an additional 7.7% decline from 1300 and be getting the S&P 500 close to what is classified as a return to a bear market. I wrote back in April how I felt that the market direction might fall to 1275 before any significant strength may appear. This morning 1275 certainly looks like an easy target to reach.

Market Direction Chart For 2012 Showing Support Levels

Market Direction Chart For 2012 Showing Support Levels Below 1300

 

Market Direction Changer Is Ben Bernanke

With so much bad news and the continuous pounding the market has taken it is interesting that the market direction has not been a lot lower. The next big changer to market direction could be Ben Bernanke. If he starts QE3 that could lead to an uptick in spending and another leg up for stocks. Whether or not he will do QE3 or a mini QE3 is anyone’s guess.

Market Direction Changer is President Obama

No President wants to try to get re-elected when the economy is falling apart and unemployment starts to creep higher. This too could be the summer market direction changer.

SPY PUT Trade Back On

Through all of this I will be continuing with my SPY Put Trade but for others who have less time to commit they may want to embark on adding some bear ETF’s or even the HDGE Active Bear Fund to their portfolios if they have not done so already. I wrote about them in this article.

All in all it could be a wild ride this summer and I am expecting whipsawing in the market direction moves all summer long.

Search

Select to view all results...

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Recent Outlooks

Stock Market Outlook for Tue Mar 19 2024 – Choppy Dips Likely But Still Up

Prior Trading Day Summary: On Monday investors took advantage of the past two weeks of weakness to jump back into stocks. By the close the S&P was up 32 points to close at 5149. The 32 points wiped out the …

Morning Investing Strategy Notes for Mon Mar 18 2024

For FullyInformed Members the morning Investing Strategy Notes for Mon Mar 18 2024 discuss the outlook for the third week of March. There are also a number of trade ideas outlined including Adobe Stock (ADBE), Chevron Stock (CVX), Exxon Mobil …

Stock Market Outlook for Mon Mar 18 2024 – Bounce Likely

Prior Trading Day Summary: On Friday investors opened the day lower and tried a weak bounce which ran into sellers as the SPX reach 5135 shortly before 11:00 AM. That proved to be the high of the day as the …

Morning Investing Strategy Notes for Fri Mar 15 2024

For FullyInformed Members the morning Investing Strategy Notes for Fri Mar 15 2024 discuss the outlook now that the PPI numbers are known. There are also a number of trade ideas outlined including Adobe Stock (ADBE), BCE Stock (BCE),  Dollar …

Stock Market Outlook for Fri Mar 15 2024 – More Weakness But Bounce Attempt Possible

Prior Trading Day Summary: On Thursday investors and analysts were surprised by the jump in inflation as shown by the PPI (Producer Price Index). Even with energy and food removed from PPI was still up sharp enough that analysts now …

Morning Investing Strategy Notes for Thu Mar 14 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu Mar 14 2024 discuss the PPI numbers and how they may impact stocks today. There are also a number of trade ideas outlined including Adobe Stock (ADBE), Dick’s Sporting Goods …

Stock Market Outlook for Thu Mar 14 2024 – Back To More Inflation Numbers – Higher Close Expected

Prior Trading Day Summary: On Wednesday investors spent a choppy day trading among market leaders both selling and others buying. By the close the SPX had lost just 10 points to close at 5165 and the NASDAQ lost 88 points …

Morning Investing Strategy Notes for Wed Mar 13 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed Mar 13 2024 discuss the outlook for the day. There are also a number of trade ideas outlined including Dollar Tree Store (DLTR), Dollar General Stock (DG), TQQQ ProShares, VIX …

Stock Market Outlook for Wed Mar 13 2024 – Morning Weakness Possible But Higher Close

Prior Trading Day Summary: On Tuesday the CPI numbers were actually a bit higher than expected but investors decided that the CPI numbers were not high enough for the Fed to not consider rate cuts probably earlier rather than later …

Morning Investing Strategy Notes for Tue Mar 12 2024

For FullyInformed Members the morning Investing Strategy Notes for Tue Mar 12 2024 discuss the outlook for the day. There are also a number of trade ideas outlined including Oracle Stock (ORCL), TQQQ ProShares UltraPro 3X Bull (TQQQ), Dollar Tree …

Stock Market Outlook for Tue Mar 12 2024 – Another Bounce Attempt Likely

Prior Trading Day Summary: On Monday investors continued to sell tech stocks that have run higher. These included Supermicro Stock (SMCI), NVIDIA Stock (NVDA), Broadcom Stock (AVGO), Advanced Micro Devices Stock (AMD), Taiwan Semiconductor Stock (TSM), Micron Technology Stock (MU), …

Morning Investing Strategy Notes for Mon Mar 11 2024

For FullyInformed Members the morning Investing Strategy Notes for Mon Mar 11 2024 discuss Friday’s non-farm payroll numbers along with the outlook for interest rate cuts. There are also a number of trade ideas outlined including NVIDIA Stock (NVDA), Broadcom …

Stock Market Outlook for Mon Mar 11 2024 – Bounce Likely But Lower

Prior Trading Day Summary: On Friday the February non-farm payroll numbers was stronger than expected at 275,000 versus 198,000 estimated but surprisingly the prior two months were reduced by 167,000. Wages however rose just 0.1% well below estimates. The initial …

Morning Investing Strategy Notes for Fri Mar 8 2024

For FullyInformed Members the morning Investing Strategy Notes for Fri Mar 8 2024 discuss the outlook for Friday once the February non-farm payroll numbers are released. There are also a number of trade ideas outlined including Costco Stock (COST), Broadcom …