Market Direction Technical Analysis Outlook For Dec 19 2012 – Breakout Confirmed

Another excellent day on the stock markets as the S&P market direction climbed another 1.2 percent to close at 1446.79. The continuing optimism among investors that the Budget talks will end in a solid resolution continued to push the stock market direction higher. Combine that enthusiasm with investors seeking the start of a Santa Claus Rally and you have market direction continuing to push higher.

Shock of shocks, in Europe, Standard & Poor raised Greece’s sovereign credit rating to B minus and gave it a stable outlook. The S&P indicated in a statement that they believed the European Economic and Monetary Union is determined to keep Greek membership in the euro zone. So where does this leave all the economists who felt it was just a matter of weeks, not months before the Euro Zone Collapse.

Apple Stock Jumps and Held NASDAQ Market Direction

Apple Stock, which had been downgraded yesterday morning, rose another 2.9 percent today and helped to drag the NASDAQ Index higher.

Intel Stock Up Again

Intel Stock, which on Dec 5 saw a buy signal generated by MACD or Moving Average Convergence / Divergence technical indicator, continued its climb today and now appears ready to try to recover the $21 valuation.

Commodities

On top of all of this oil rose 73 cents, gold plunge $27.50 dragging Barrick Gold Core down 1.5 percent. Barrick Gold (Symbol ABX) was on my radar in yesterday’s Trading Ideas post in my Members Section. Today I was busy Put Selling ABX Stock. Strangely even with the stock down 1.5 percent the $31 put strike hardly moved. I got my fill at .31 cents but I sat for a long time at .35 without any action which surprised me. Obviously the outlook is that ABX Stock will not get down to $31 by January options expiration.

Market Direction Technical Indicators of Dec 18 2012

Let’s look at the market direction technical indicators at the close of today on the S&P 500 to see if we can determine if the market direction rise will continue.

Market Direction Technical Outlook Dec 18 2012

Market Direction Technical Outlook Dec 18 2012

For Momentum I am using the 10 period. Momentum is still positive and climbing signaling market direction is up.

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) is still positive and is back climbing. The readings are gaining in strength as the market direction is pushing higher.

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 back positive and not overbought signaling lots of room for the market direction to continue higher.

Rate Of Change is set for a 21 period. The Rate of Change remains positive throughout last weeks shallow pullback. It is not rising and signaling market direction is still moving higher.

For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is overbought but it is now signaling market direction is higher. Yesterday the reading was for market direction to be lower, but that has changed. As the Slow Stochastic looks out more than a day or two I can surmise that the market direction should be higher toward the end of the week than where it is now.

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 extremely overbought which is a good sign technically and shows strength continues to build to push market direction higher. The overbought indication may mean a shallow dip in market direction tomorrow and then a move higher into the close. But if there is a dip it will be another Put Selling opportunity as the breakout in market direction that occurred last week is being confirmed today.

Market Direction Chart Of S&P 500

Below is the latest Market Direction chart for the S&P 500 Stock Market Index. The market has broken the series of lower lows and lower highs and moved back to higher lows and higher highs signaling that the market direction is higher. The most recent high for this year is around the 1462 level. The market close today was just 15 points away from that high. With the S&P 500 now breaking above the 50 period moving average, the breakout of last week has been confirmed.

market direction - Dec 18 2012

market direction for Dec 18 2012

Market Direction Outlook And Strategy

Market Direction outlook for Dec 19 2012 is for a possible shallow dip but there is so much strength that any dip will be bought and market direction will push higher. The market direction should continue to rise tomorrow but it may be later in the day as some investors will be taking profits after two 100 point days back to back in the Dow.

The market direction higher today broke the barrier of the 50 period moving average. This confirms the Dec 11 2012 market direction breakout call. A breakout is an important event and signals an attempt by the stock markets to push the envelope of stocks to the upside and break free of past top levels. The markets appear ready to try to set new 52 week highs.

Market Direction for the markets to move higher even if there is some selling. Any selling should be shallow as market direction remains higher.

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