The outlook on Thursday was for a possible rally but in general the trend right now is lower. Today saw another rally attempt which at one point has the S&P up to 2067.65 shortly before 3:00. Then the computer programs kicked in and volume came close to a billion shares in the last hour of trading sending stocks lower with an eventual close up just 4.61 points. The DOW JONES was up 200 points to 17,697.74 and then the last hour pushed the index down almost 120 points to close up 82.45 points to 17,574.75. The same story came from the NASDAQ which was up to 5075.65 until the last hour of trading when the NASDAQ fell back to close up 22.31 points to 5045.17. But at least on Thursday, stocks finally closed up.
Advance Decline Numbers
Volume today was lower by 720 million shares, reaching just 3.67 billion by the close with almost a billion of that volume in the last hour of trading. By the close 39% of all volume was moving lower while 59% was moving higher. New lows though were stubborn and stay ed high at 149. New highs fell back to just 19. Of all issues listed on New York 48% were advancing and 49% were declining on Thursday. These are still not the numbers needed for any kind of sustained rally.
Market Direction Technical Indicators At The Close
SPX Market Direction Technical Analysis for Dec 10 2015
Stock Chart Comments:
The 50 day simple moving average (SMA) continued to climb above the 100 and 200 day moving average. Yesterday it generated a new buy signal on the market. The close today saw the index below the 50 day but above both the 100 and 200 day moving averages.
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 negative and moving lower.
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 gaining strength..
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 negative and falling.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is negative and moving lower.
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 down for stocks.
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 for stocks.
Market Direction Outlook for Dec 11 2015
For Friday, the end of the week, the technical indicators remain bearish. There are no up signals and no positive readings. The Fast Stochastic did turn up today although it is still negative. This could however signal a possible attempt at another bounce for Friday.
However with the Fed meeting just days away now investors may hold back waiting for news of the interest rate decision from the Fed.
For Friday, stocks look set to stay the course and move sideways and try to climb. However investors remain nervous ahead of the Fed meeting next week and any further drop in oil prices will place them even further on edge. That means overall while we could see some upside on Friday the trend presently remains with a downward bias.
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