The market direction outlook for Wednesday was for continued pressure to the downside. Today for a short while, investors tried to push back against the growing number of sellers. With all the Indexes sitting near record highs and nervousness among investors growing, it just took the Fed minutes to get selling starting in the mid-afternoon.
Market Direction S&P 500 Intraday For Nov 20 2013
The 1 minute market direction chart for the S&P 500 below shows how the day progressed. The morning had some selling but the lows held and the market then pushed higher. But the highs did not hold and the market sold back down and then drifted sideways into the Fed minutes report. That’s when the selling started as the Fed report showed that there is a growing belief that they cannot continue at the pace of bond buying that is presently happening. They feel they must begin to taper shortly.
Advance Declines For Nov 20 2013
Declining issues outpacing advancing issues again today with 65% of all stocks declining versus 21% advancing. New highs were only at 81 and new lows at 117. Both of these indicate there will be more selling pressure on Thursday.
Market Direction Closing For Nov 20 2013
The S&P 500 closed at 1,781.37 down 6.50. The Dow closed at 15,900.82 down 66.21. The NASDAQ closed at 3,921.27 down 10.28.
The IWM ETF closed at $109.33 down just 0.04.
Market Direction Technical Indicators At The Close of Nov 20 2013
Let’s review the market direction technical indicators at the close of Nov 209 2013 on the S&P 500 and view the market direction outlook for Nov 21 2013.
The most important support line in the S&P 500 at this time in the ongoing rally remains 1750. That support line is holding the market direction up at present. This is the third down day for the S&P in a row and that has not happened since Sept 19 when the market direction was down for 4 days straight.
For Momentum I am using the 10 period. Momentum is still positive but is continuing to fall.
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 Nov 7 which was not confirmed. The signal of Nov 14 was market up and it was confirmed on Nov 15. Today, Nov 20 another sell signal was issued by MACD.
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 neutral and prepared to fall into negative readings.
Rate Of Change is set for a 21 period. The Rate Of Change is positive but staying lower..
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is signaling that the market direction is down and it is overbought.
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 that the market direction is down.
Market Direction Outlook And Strategy for Nov 21 2013
There is no doubt what the majority of the Market Direction Technical Analysis indicators are signaling. With 3 technical indicators pointing down, one neutral and two still positive, the outlook is for the market direction to move lower.
Unfortunately my webhost provider was fully down today taking millions of sites down as well. I was unable to post much during the day and evening but suffice to say I was stopped out of the market direction portfolio and bought DXD shares. I will update the portfolio tomorrow.
Meanwhile the next step is to see how much push investors will give the market direction lower. At this point there technical indication is for more weakness tomorrow but this is a bull market and it can come roaring back pretty quickly. The Fed news is really more old news than anything else. Investors have been spooked so many times, perhaps it is like Peter and the Wolf. Investors are tired of the Fed always crying wolf. They may choose to ignore the cries of wolf this time around.
I had a lot of positions expire on Friday last week and so I have a lot of capital back available for more Put Selling. This is just an ideal time for the market direction to move lower. I will be looking for more opportunities tomorrow for Put Selling.
We could see tomorrow the market direction try to shift back to up and I am sure there will be some buying of a handful of stocks that have moved lower today, but overall I think the market direction is down to allow for a chance to regroup and then once more try to retake the 1800 level.
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