Market Direction For Last Week Of October 2012 – Ready To Bounce?

Market Direction was all down hill last week marking the worst week since May. Earnings from many large cap companies including Apple sent a few shock waves through the stock markets. By Friday though sellers seemed unwilling to keep selling but many buyers stayed on the sidelines. The Dow ended up just 3.53, the NASDAQ was up 1.83 and the S&P down 1.03.  Basically the market direction was flat to end the week. This could mark a turning point to start the week off. A couple of the stock sI follow actually had a decent day on Friday. Among them was Intel Stock which closed up 1.2% closing at 21.95 and Microsoft Stock up 1.18% at $28.31. Apple stock closed down to $604.00 almost a 1% drop. Apple stock is now down 14 percent.

On Friday the Commerce Department reported that US Domestic Growth for the third quarter was growing at 2 percent just slightly above the expected 1.8 percent. A lot of this though was government spending on defence. This is a slight increase over the 1.3 percent in the second quarter. The problem is this GDP is not enough to get the economy humming and unemployment down.

Market Direction – 100 Day Moving Average

With the market down to the 100 day moving average I would expect a bounce back and then we should see where the market direction is heading for the Presidential election.

Market Timing Technical Indicators For Friday Oct 26

Here are the market timing technical indicators from Friday’s closing. Momentum is negative but unchanged from Thursday. MACD (Moving Average Convergence / Divergence) is at negative 4.62 almost unchanged from Thursday as well. The Ultimate oscillator is still bearish but up slightly from Thursday.

Rate Of Change however has continued to fall.

The Slow Stochastic is oversold but has a neutral reading. This usually means that the market direction is probably not moving a great deal for a few days. However the Fast Stochastic is extremely oversold but is leaning toward a possible bounce back with K Period at 12.80 and D Period at 12.02.

Market Direction Oct 26 12

Market Direction Outlook For Last Week of Oct 2012

A lot of nervousness among investors last week took its toll on stocks. The start of this week looks to be setting things up for a bit of a bounce. The market timing indicators are still bearish but there are enough signs to indicate that if there isn’t a bounce, the market might at least not fall much into the start of the week.

For FullyInformed Members following the market direction portfolio, William made changes throughout the week as the Dow fell by adjusting his stop and when the Dow rose on Thursday he was stopped out . It should be interesting to see what he does next.

I will be updating my market direction each day this week as we head into the final campaign for the US Presidential Election. In prior election years  the market direction can fluctuate which often makes option premiums larger. Meanwhile for investors following the Trading For Pennies Strategy  keep an eye on the overall market direction and try to stay with the trend.

  • Teddi,
    You write: “””For FullyInformed Members following the market direction portfolio, William made changes throughout the week as the Dow fell and he was stopped out on Thursday. It should be interesting to see what he does next.”””
    I am confused. William was long DXD (short DJ). Wasn’t he stopped out when the Dow rose?

  • Sorry. I changed it for you. What I was trying to explain was how he kept adjusting his trade as the Dow fell and then was stopped out on Thursday. You should be able to see the strategy he was using by checking out the market direction portfolio index here: http://www.fullyinformed.com/members/market-direction-portfolio-trades/
    Thanks for spotting that for me.
    Teddi