Today a number of factors weighed on stocks. Apple pulled back thanks to a report from Credit Suisse dropping their iPhone 6 2016 outlook from 242 million to 222 million. They also cut their earnings per shares by 6% for 2016. China was also in the news again today as their consumer price index rose less than the 1.3% forecast for October which analysts pointed to as another signal China’s economy is continuing to slow.
Investors stayed in a selling mood on Tuesday keeping the indexes at 6 week lows. The close today saw the indexes well off the lows for the day.
Market Direction Closings
The S&P was as low 2069.91 but closed the day at 2081.72 up 3.14. The DOW closed at 17,758.21 up 27.73 and again well off the low of 17,657.72. The NASDAQ closed at 5,083.24 down 12.06 dragged lower by Apple Stock’s decline.
Market Direction Technical Indicators At The Close of Nov 10 2015
SPX Market Direction Technical Analysis for Nov 10 2015
Stock Chart Comments:
The S&P during the day fell back to the 20 day simple moving average (SMA) or Middle Bollinger Band again and bounced off this moving average. The S&P closed higher today but below Monday’s open. While the market is not oversold there are signals both for stocks to move up on Wednesday and for them to move lower..
Meanwhile the 100 day moving average is still moving toward the 200 day moving average and nearing the point where it may cross over and above the 200 day. That would be a bullish signal. The 20 day and 50 day moving averages are still rising and the SPX held above the 2075 level for a second day today.
The Bollinger Bands are moving higher as well following the market direction up.
Support and Resistance Levels:
These are the present support and resistance levels.
2100 is 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 turned sideways today almost unchanged from Monday.
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 buy signal on Friday Oct 2. Today MACD issued a sell signal. This sell signal has to be confirmed.
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 and moving sideways.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive but lower. The signal is weak but has changed to moving sideways from falling..
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.
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 pointing down for stocks but is also turning up although the signal is still negative..
Market Direction Outlook for Nov 11 2015
On the weekend in the market direction outlook I had explained I was looking for weakness both Monday and Tuesday. Today we got another weak day although the close turned positive. Technically, 3 indicators are pointing lower. Among them is MACD which issued a sell signal today. The other 3 indicators are still positive although they have fallen over the past several days.
This gives us a split outlook for stocks. We could see a bit of a sideways day on Wednesday although personally I think the market could turn up even slightly, on Wednesday. The closing candlestick on Tuesday is also bullish for stocks.
The difficult part of tomorrow’s prediction is MACD which turned negative and issued a sell signal. What we might see is a move higher by the close on Wednesday but then more selling again on Thursday.
For Wednesday then, stocks look set to remain weak but I don’t think either a large up or down move will end up being the case. I think stocks on Wednesday will be trending sideways with some dips and pullbacks occurring particularly in the morning and afternoon but another slightly positive close by the end of the day..
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