Yesterday was definitely a technical bounce back in the market direction. Today all the fighting over the debt ceiling by politicians in both parties continues to undermine investor confidence. The Weekly Initial Unemployment Insurance Claims from yesterday continue to point to an improving economy but its amazing how politicians just cannot get their act together. Like kids at school the politicians have left the debt budget ceiling until the last moment. Reminds me of when my kids were at school. I was always harassing them to get their projects done before the deadline but they always left it until the last minute. Politicians in general seem to be even worse than kids.
Market Direction Intraday Sep 27 2013
The S&P 500 is continuing its journey lower as it pushed to 1687 this morning by 10:00 AM. You can see in the 1 minute daily chart below for today that this was followed by a somewhat erratic push back. Investors remain worried about the debt ceiling issue. I am expecting the market direction to push lower into the close unless there is a signal from the politicians that a true resolution is within their grasp.
Intraday Market Direction Oversold But…
The Ultimate Oscillator is definitely showing the market direction is oversold but you can see in the chart below that the oversold indicator is turning back down again after a very brief bounce up.
Below is the technical outlook intraday around 3:00 on Sep 27 2013.
1680 is the line in the sand for the S&P 500 and the most support for the latest rally and the new highs recently made in the market. It also marks the 50 day simple moving average (SMA). I think we have a good chance it will be tested.
A. Momentum is almost negative.
B. MACD (Moving Average Convergence / Divergence) is ready to issue a sell signal unless the market direction moves slightly higher than 1690 today.
C. You can see the recent bounce in the Ultimate Oscillator from oversold and now it is heading back there again.
Market Direction Close Today
For the close today I am looking for the market direction to continue to stay under pressure. Investors are worried and while I see no signs of an impending collapse, a lot of investors are looking at October and wondering what might happen. October has a spooky past of severe corrections but also a past of terrific returns so either could be possible. However the S&P 500 has already had a terrific year so perhaps the question is what upside potential is left for this year? Could we look at a further 5% or 8% return? That would definitely place 2013 as an incredible year for stocks and certainly a standout. For that, we will have to wait and see.
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