It might not feel like it, but last week the S&P had its best week since July. The S&P opened the shortened week at 1927.30 and ended on Friday at 1961.05 for a gain of 1.75%. The problem for most investors however was the uncertainty as many days saw some pretty wild swings. Even on Friday the S&P at one point was down 0.7% before rallying to close up 0.45%. These are tough swings for most investors and even seasoned investors are cautious and a lot of investors have raised cash.
Market Direction Closings For Sep 11 2015
The S&P closed at 1,961.05 up 8.76. The Dow closed at 16,433.09 up 102.69. The NASDAQ closed at 4,822.34 up 26.09.
Advance Decline Numbers for Sep 11 2015
Volume today came in at 3.2 billion a drop of above 400 million but still above 3 billion shares. New lows came in at 145 and new highs at 9. Down volume on New York was 46% and up volume came in at 51% so it was a very close day although the large down volume percentage was primarily from earlier in the day. It was a fairly neutral day although new lows continues to grow which is of concern as stocks head into the third week of September.
Market Direction Technical Indicators At The Close of Sep 11 2015
Let’s review the market direction technical indicators at the close of Sep 11 2015 on the S&P 500 and view the market direction outlook for Sep 14 2015.
SPX Market Direction Technical Analysis for Sep 11 2015
Stock Chart Comments:
The S&P rallied back from a loss of 0.7% today to move higher by 0.45% however the 50 day moving average in below the 100 and 200 day moving averages. As well the 20 day simple moving average (SMA) continues to fall and has been in a steady downfall since mid-August.
The S&P did close up but is still below the highs of earlier this week.
The S&P is above the 1956 support level but below the 1970 support level.
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.
2075 was light support. Below that was 2050 which is also was light support. Stronger support was 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.
Weak support was at 1970 while stronger support was at 1956 and technically it is was more important than 1970 for the market. 1940 is light support. 1920 and 1900 have very little if any 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.
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: Momentum is negative on Friday after falling for the past three days.
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 Sep 10. That signal was confirmed on Friday.
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 still trying to rise
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal remains negative at minus 5.99 and is trending sideways refusing to confirm any upside move. At minus 5.99 a bounce could be expected.
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 pointing up 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 pointing up for stocks.
Market Direction Outlook for Sep 14 2015
The morning could be a bit weak to start the day but I would expect the stochastic indicators to be correct and by mid-morning I would expect the S&P to be positive but only mildly. This is the most important week in months as the Fed Interest Rate decision comes out on Thursday. There may however be some indications by Wednesday of a rate decision or strong enough rumors to see increased volatility. Momentum is falling but only mildly but it needs to be watched. The past week saw the market become “tighter” as the week progressed with less gains or falls on Thursday and Friday. The market will react this week one way or the other with the Fed rate decision.
I am expecting Monday to be positive but fairly flat. I am expecting more volatility as the day progresses. Investors are nervous and the rate decision has odds of probably 50/50 at this time.
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