The market direction outlook for Monday was for a bounce to be attempted but fail. That was not the case on Monday as the bounce managed to push the market up just over half a percent. The most important aspect of Monday’s rally was that the market direction pushed back up above 1780 and closed at 1786.54 giving a strong indication that the S&P is going to hold the 1780 level.
Most of the action on Monday was a reaction by investors to an oversold market. As well investors are now back betting that the Fed will not taper until into the new year. This on-again, off-again approach by investors may seem difficult to invest in but it is excellent for Put Selling. Selling put options that are out of the money or out of where the stock is trading are excellent as a means to keep bringing in income while staying outside of the dips in stocks that have taken place over the past 4 trading sessions.
Market Direction S&P 500 Intraday For Dec 16 2013
Market Direction action today was uneventful once the opening bounce was completed. For the rest of the day the market basically drifted sideways.
Advance Declines For Dec 16 2013
Advancing issues controlled the market today with 64% of issues advancing and 33% declining. New highs though came is at 116 while new lows still dominated with 128 new lows.
Market Direction Closings For Dec 16 2013
The S&P closed at 1786.54 up 11.22. The Dow closed at 15,884.57 up 129.21. The NASDAQ closed at 4029.52 up 28.54.
The IWM ETF looks a big jump moving ahead by 1.19% to close at 111.51 up $1.31.
Market Direction Technical Indicators At The Close of Dec 16 2013
Let’s review the market direction technical indicators at the close of Dec 16 2013 on the S&P 500 and view the market direction outlook for Dec 17 2013.
The most important support line in the S&P 500 at this time in the ongoing rally is still 1750. That support line is holding the market direction up at present and that has not changed. 1780 was broken late last week but today the market moved back above 1780 and closed above it. This is a good sign technically for the market.
For Momentum I am using the 10 period. Momentum has been the best indicator during this recent correction. Momentum is still negative today but another up day tomorrow and momentum could turn positive.
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 weak sell signal on Friday Nov 29 when MACD was slightly negative. MACD seemed somewhat uninspired by today’s move higher and moved up just slight to a negative 4.24 reading.
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 negative but bounced from being oversold.
Rate Of Change is set for a 21 period. The Rate Of Change was negative on Monday but turning sideways rather than lower.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is signaling that the market direction is still down despite today’s move higher. It does though show a nice bounce from being oversold.
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. Thursday’s sell signal is still in effect. The Fast Stochastic is signaling that tomorrow will see a continuation of the market direction higher. It is still oversold.
Market Direction Outlook And Strategy for Dec 17 2013
A lot of today’s action was the oversold state of the market. That said, December is also one of the best months of the year for stocks and investors definitely are aware of this. Many investors saw the weakness last week as an opportunity to pick up stocks for another push higher just based on the seasonality of stocks in December and the very good chance there will be a rally between Christmas and New Years. That would be the so-called Santa Clause rally.
There is not a lot to say about today’s move except that the direction is mixed. While the Market Direction Technical Indicators show that stocks may move higher on Tuesday they still indicate that overall direction is lower until a couple more technical indicators turn positive. In general the technical indicators were unimpressed with today’s rally.
My personal outlook is that stocks could turn sideways tomorrow ahead of the Fed meetings and announcement on Wednesday. Still though it is worth staying focused on the technical indicators which right now enjoyed today’s rally, but are still indicating that while we could see a further bounce tomorrow, the market direction down is still quite strong.
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