The market direction outlook for Tuesday Nov 11 was for stocks to remain sideways but continue to trend with the bias up. By the end of the day that is indeed what happened with slight gains seen on the 3 indexes, SPX, Dow and NASDAQ.
US Dollar Pulling Back
The US dollar pulled back slightly on Tuesday against most global currencies. This help to boost global markets and commodity prices.
Advance Declines For Nov 11 2014
Volume continues to fall on Tuesday with just 2.9 billion shares traded. Up volume was still mixed with just 52% of volume moving higher and 46% moving lower.
Market Direction Closings For Nov 11 2014
The S&P closed at 2039.68 up 1.42. The Dow closed at 17,614.90 up 1.16. The NASDAQ closed at 4660.56 up 8.94.
The Russell 2000 IWM ETF closed up just 8 cents at $117.37.
Market Direction Technical Indicators At The Close of Nov 11 2014
Let’s review the market direction technical indicators at the close of Nov 11 2014 on the S&P 500 and view the market direction outlook for Nov 12 2014.
SPX Market Direction Technical Analysis for Nov 11 2014
Stock Chart Comments: Stocks on Tuesday moved up only slightly buts the 0 day simple moving average (SMA) pushed higher and is now sitting just below the 50 day simple moving average (SMA). The Upper Bollinger Band is still widening signaling higher prices for stocks on Wednesday.
Strong Support Levels are at 1870 and 1840. Both levels are strong enough to delay the market falling. 1956 and 1970 are back as support for stocks. 2000 is the highest level of support at present and while not strong, it should have enough strength to hold sellers back for at least a day in the event of an interim pullback. I am not expecting this to happen at this stage of the rally. The market direction still looks like it wants to consolidate and then possibly move higher.
The other two support levels not shown in the chart above 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 now the bottom line.
A break of 1750 would mark a severe correction of more than 13% from the most recent high. This would be the biggest correction since April 2012. A pull-back of that size would definitely stun investors at this point and it is not something I am anticipating at this time.
Momentum: For Momentum I am using the 10 period. Momentum is still positive.
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 October 22. MACD is continuing to gain 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 positive and remains extremely overbought..
Rate of Change: Rate Of Change is set for a 21 period. The rate of change is staying positive and is now at 8.63 down very slightly from yesterday’s reading. Above 8 markets often turn around and head the other way.
Slow Stochastic: For the Slow Stochastic I use the K period of 14 and D period of 3. As the Slow Stochastic tries to predict the market direction further out than just one day. The Slow Stochastic is signaling market direction is down to neutral and it is extremely overbought.
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 neutral for stocks and is extremely overbought.
Market Direction Outlook And Strategy for Nov 12 2014
The outlook for Wednesday and the rest of this article is for USA Members. FullyInformed USA Members can login directly through this link to review the latest market direction outlook and investing strategy notes for Nov 10 2014 or Members can sign in to the full USA members site here. Non-members can join here or read about the benefits of being a member.
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