On Thursday it was all about oil falling to two a half month lows, dragging the energy sector down, commodities tumbling to what are now multi-year lows, weak Chinese economic data, a rising US dollar and finally, comments from New York Fed President Dudley amking it seem clear that the Federal Reserve is intent on raising rates in December. With the market stumbling this week and being unable to recover, the sell-off today took all the indexes lower and saw them close on their lows.
Advance Decline Numbers
Volume was 3.9 billion shares with 89% of that volume moving lower. 79% of all stocks on New York were moving lower. New lows rose to 181 and new highs were just 16. The advance decline numbers point to further downside still ahead for stocks..
Market Direction Closings
The S&P closed at 2,045.97 down 29.03 and at the low for the day. The DOW closed at 17,488.07 down 254.15. The NASDAQ also closed almost at today’s low, 5,067.02 down 16.22..
Market Direction Technical Indicators At The Close of Nov 12 2015
SPX Market Direction Technical Analysis for Nov 12 2015
Stock Chart Comments:
The S&P closed today at the 200 day moving average and for the first time since Oct 5, below the 20 day simple moving average (SMA). The decline is a culmination of a number of factors that have weighed on investors over the past couple of weeks. However basically the decline today is the 6 down day in 7 trading days. Not a record mind you but a signal that there is more downside still ahead for stocks.
The 100 day moving average is continuing to turn lower and away from the 200 day signaling more downside is ahead. turning lower and moving away from the 200 day moving average. Meanwhile the Lower Bollinger Band is still moving above the 50 day moving average which is a sign of weakness. All the signals from the chart today by the close were negative for stocks.
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 was 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 falling.
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. Today MACD is strengthening to the downside.
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 positive but is now 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 strongly 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 also have a very strong down signal at the close today.
Market Direction Outlook for Nov 13 2015
Yesterday 4 indicators were negative and two were positive but weak. Today 5 are negative and one, the rate of change remains positive but weak. When the market did not move higher yesterday with the bond market closed for Veterans Day it was a poor sign for stocks. The move lower today confirms what we saw yesterday. The close at the low of the day should see a bounce back tomorrow morning and then more selling.
The market will probably try to retake 2050 in the morning and then give it back in the afternoon or over the lunch hour. Stocks have further to fall before they stabilize. Volume today was 3.9 billion which was up from yesterday but we will probvably see higher volumes on Friday as investors decide to move once more to the sidelines..
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