The outlook for Tuesday Nov 25 2014 was for stocks to continue their advance even if only modestly. Stocks though continued their see-saw sideways movement as investors are obviously becoming preoccupied with the upcoming Thanksgiving holiday on Thursday and shortened day for Friday when exchanges close at 1:00 PM. A GDP number was released today which at 3.9% beat analysts estimates. But it was still lower than the second quarter GDP of 4.2% and much of the better number for the third quarter was a result of the auto industry.
SPX Intraday Market Direction for Nov 25 2014
Volume was actually not too poor today considering Wednesday is the day before Thanksgiving holiday. The GDP number enthused investors at the outset with a small gap up at the start which set another new all-time intraday high of 2,074.21. From there sellers once more stepped in who love to sell these new highs. They pushed stocks back to 2065 before buyers fought back. By the earlier afternoon the S&P was back to just shy of 2072 but there was just not enough conviction to attempt to break the morning high. The market drifted sideways into the close at 2067.03 for a small loss of 2.38 points..
Advance Declines For Nov 25 2014
Volume moved up to 3.4 billion shares traded on Tuesday. 45% of all volume was up and 52% down. New highs came in at 172 a jump higher from Monday and new lows moved up slightly to 24. Despite the down volume the bulls remained in charge again on Tuesday.
Market Direction Closings For Nov 25 2014
The S&P closed at 2067.03 down 2.38. The Dow closed at 17,814.94 down 2.96. The NASDAQ closed at 4758.25 up 3.36.
Market Direction Technical Indicators At The Close of Nov 25 2014
Let’s review the market direction technical indicators at the close of Nov 25 2014 on the S&P 500 and view the market direction outlook for Nov 26 2014.
Stock Chart Comments: The trend higher continues with the candlesticks continuing to press toward the Upper Bollinger Band. The Bollinger Bands Squeeze is still underway and the Lower Bollinger Band has now broken through all the major moving averages (50, 100 and 200) and the 20 day is rising rapidly.
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 no longer looks like it is consolidating. A move either up or down is rapidly coming.
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 and moving sideways.
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 no longer gaining strength and continues to narrow the divergence. It is however positive and that alone supports the outlook for stocks to continue to grind higher. Today though marked an even further narrowing of the divergence.
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 9.44 up from yesterday. The Rate Of Change has turned lower again which once more brings up the question of a possible change in the short-term trend.
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 down for stocks and is also extremely overbought.
Market Direction Outlook and Investing Strategy Notes for Nov 26 2014
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