The outlook for Thursday Nov 20 2014 was for the market to be more a “see-saw” with a possible slight gain. We saw mostly that during the day.
SPX Intraday Market Direction for Nov 20 2014
The one minute intraday chart below shows the day’s activity. A short drop right at the open led to an immediate rally. By about 11:30 the day’s high was in. The rest of the day stocks drifted sideways but with a definite bias lower. Buying in the last half hour pushed the SPX up but still kept the pattern of lower highs and lower lows. Friday should be interesting.
SPX intraday for Nov 20 2014
Advance Declines For Nov 20 2014
Volume was down by 300 million shares to 3.1 billion. Up volume though rose to 66% and down volume fell to 31% so the bias was definitely higher. New highs rose t just to 7 while new lows fell back to 37. In general investors were moderately bullish for stocks.
Market Direction Closings For Nov 20 2014
The S&P closed at 2052.75 up 4.03. The Dow closed at 17,719.00 up 33.27. The NASDAQ closed at 4701.87 up 26.16.
Market Direction Technical Indicators At The Close of Nov 20 2014
Let’s review the market direction technical indicators at the close of Nov 20 2014 on the S&P 500 and view the market direction outlook for Nov 21 2014.
Market Direction Technical Analysis for Nov 20 2014
Stock Chart Comments: The chart tonight shows the S&P almost unchanged from yesterday. The Bollinger Bands Squeeze continues to form but the 20 day simple moving average (SMA) is pushing still higher and with the S&P entering the squeeze above the 20 day, there is a good chance of a further push higher. First line of support is still at 2000. We need to see the Upper Bollinger Band move higher into the squeeze though otherwise it will signal a change down for the trend.
Strong Support Levels are at 1870 and 1840. Both levels are strong enough to delay the market falling. 1956 and 1970 are back as support for stocks. 2000 is the highest level of support at present and while not strong, it should have enough strength to hold sellers back for at least a day in the event of an interim pullback. I am not expecting this to happen at this stage of the rally. The market direction no longer looks like it is consolidating. A move either up or down is rapidly coming.
The other two support levels not shown in the chart above are 1775 and 1750. I have explained that these two are critical support for the present bull market. While 1775 is important it is 1750 that is now the bottom line.
A break of 1750 would mark a severe correction of more than 13% from the most recent high. This would be the biggest correction since April 2012. A pull-back of that size would definitely stun investors at this point and it is not something I am anticipating at this time.
Momentum: For Momentum I am using the 10 period. Momentum is still positive but moved slightly lower today..
MACD Histogram: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9. MACD (Moving Averages Convergence / Divergence) issued a buy signal on October 22. MACD is no longer gaining strength and is starting to indicate a possible change in the divergences. It is nearing a sell signal if the market direction does not pick up and move higher within a day or two.
Ultimate Oscillator: The Ultimate Oscillator settings are: Period 1 is 5, Period 2 is 10, Period 3 is 15, Factor 1 is 4, Factor 2 is 2 and Factor 3 is 1. These are not the default settings but are the settings I use with the S&P 500 chart set for 1 to 3 months. The Ultimate Oscillator is positive and remains extremely overbought.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change is staying positive and is now at 9.44 up from yesterday. The Rate Of Change has turned back up. This often signifies a new change in trend is coming. That change can be either up or down. At this point it is non-conclusive.
Slow Stochastic: For the Slow Stochastic I use the K period of 14 and D period of 3. As the Slow Stochastic tries to predict the market direction further out than just one day. The Slow Stochastic is signaling market direction is down to neutral and it is extremely overbought.
Fast Stochastic: For the Fast Stochastic I use the K period of 20 and D period of 5. These are not default settings but settings I set for the 1 to 3 month S&P 500 chart when it is set for daily. The Fast Stochastic is signaling down to neutral as well for stocks and is also extremely overbought.
Market Direction Outlook And Strategy for Nov 21 2014
Technically there is no change from yesterday. We are seeing sideways action continuing. Stocks remains on the verge of breaking. The Ultimate Oscillator is heavily overbought indicating buying pressure remains but many signals are indicating stocks are having trouble rising much further. In general though investors seem determine that stocks are going to move up.
For Friday the market still appears indecisive but today’s action once again was not bearish. Tomorrow stocks may once again start with a quick drop and then pick up to close a bit higher. The technical indicator that there is trouble so a move higher seems unlikely but the lack of selling would hint that stocks are ready to push higher. It will probably take the Bollinger Bands Squeeze to end this sideways action. There is so much talk of a downturn that it is rare when most analysts are right. I am undecided today and see another see-saw day but if I was asked my personal outlook I would have to say still up slightly..
Stay FullyInformed With Email Updates
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)