Volume picked up considerably today and for the first time with good volume, new highs outpaced new lows. Unfortunately though down volume swamped up volume and that meant a negative close.
The outlook for Monday was for a bounce at the start and then weakness and a slightly negative day although I had expected the S&P to turn positive into the close. I almost got my wish as by 2:00 PM the S&P was approaching 2090, but the late afternoon brought in sellers who closed the S&P down to 2080.41 for a loss of 9.70 points.
Advance Decline Numbers
Volume on Monday was 4.28 billion shares with 61% of the volume to the downside. New highs though came in at 79 while new lows fell back to 57.
On the NASDAQ volume was 2.24 billion shares traded and 55% of all volume to the upside. New highs came in at 124 while new lows fell back to 46.
While New York numbers were not as suggestive of a coming advance, the NASDAQ numbers were.
Market Direction Technical Indicators At The Close of Nov 30 2015
SPX Market Direction Technical Analysis for Nov 30 2015
Stock Chart Comments:
The S&P close on Monday was still above all three major moving averages but down at the 20 day simple moving average (SMA) which is the first moved back to the 20 day simple moving average (SMA) for the past 7 trading days.
The 100 day moving average has now moved above the 200 day on stronger volume on Monday. The move above the 200 day again today, confirms Friday’s up signal. Meanwhile the 50 day moving average is still climbing toward the 200 and 100 day moving averages.
The Lower Bollinger Band is still moving above the 50 day moving average and is nearing the 100 and 200 day moving average which is a bearish signal. At the same time a Bollinger Bands Squeeze is now underway which looks poised to send stock either up or down as the signal is unclear.
The closing candlestick on Monday was bearish for Tuesday.
Support and Resistance Levels:
These are the present support and resistance levels.
2100 was light support. Stocks have been unable to stay above this level and push higher on numerous occasions. It remains resistance.
2075 is light support. Below that is 2050 which is light support. Stronger support is at 2000 which had repeatedly held the market up throughout each pullback in January and February but failed under the waves of selling in the last correction. Stocks continue to have trouble holding the 2000 level.
Weak support is at 1970 while stronger support is at 1956 and technically it is more important than 1970 for the market. 1940 is light support. 1920 is now light support. 1900 is more symbolic than anything else.
1870 and 1840 are both levels with strong enough support to delay the market falling and should see a sideways action attempt while investors decide whether to sell or buy. So far 1870 has held the market up better than any of the other support levels aside from 2000 which held the market up for months before the collapse in August.
The other two support levels 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 the bottom line.
A break of 1750 would mark a severe correction of 384.72 points or 18% from the all-time high of 2134.72. This would be the biggest correction since April 2012. A pull-back of that size would definitely stun investors and bring to question whether the bull market is finished.
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and rising.
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 sell signal on Friday Nov 10. The sell signal is now weak but it remains in force.
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 but falling.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is neutral to negative as it slipped into a full negative reading by the close today.
Slow Stochastic: For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic tries to predict the market direction further out than just one day. The Slow Stochastic is signaling up for stocks although the signal up is in jeopardy of changing to down..
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 lower for stocks.
Market Direction Outlook for Dec 1 2015
Historically, the NASDAQ has been higher in 19 of the past 27 years on the first day of December. Unfortunately though, it has been lower in 5 of the last 8 years.
The technical indicators are now 3 negative to 3 positive although the positive indicators are now dropping. This gives us a mixed signal for Tuesday despite my belief the market will move higher as this week progresses.
Tuesday may see a bit more weakness as investors are somewhat nervous over the non-farm payroll numbers which are set for release on Friday. That nervousness may hold into Tuesday for stocks. With 3 technical indicators pointing down and trading volume remaining largely negative, the outlook for Tuesday is for stocks to move lower. My personal outlook though, is for stocks to climb on Tuesday.
For Tuesday we are at a bit of a crossroads with signals pointing neutral for stocks.
The bias remains to the upside for stocks presently.
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)
Market Direction External Links
IWM ETF Russell 2000 Fund Info
Market Direction SPY ETF 500 Fund Info