My market direction outlook for Wednesday was for a possible bounce back. Overall though the bounce back would fail this week and the market direction continue to move lower. Today politics again entered the picture as the news that House leaders were meeting to try to piece together a temporary “deal” caught the market as it was plunging lower and turned it back around. The close though was not pretty as the S&P closed back off the highs but did manage to stay green. Let’s take a look.
S&P 500 Intraday Chart for Oct 9 2013
The morning saw a rally attempt and then the sell-off commenced pushing the S&P quickly through 1650. There really is so little support below $1670 that these remaining support points are merely slowing the descent. By 11:30 though the news out of Washington on the debt ceiling talks pushed the market direction back up and the S&P climbed above 1660. The close through was none to pretty as the market fell quickly back below 1660 and closed below it.
Moving Averages Support
The S&P 500 managed to cling to the 100 day exponential moving average (EMA) by the close and the Dow managed to hang onto the 200 day exponential moving average (EMA). Both are important technical barriers but the 100 day exponential moving average (EMA) on the S&P 500 has little support.
Advance Declines For Oct 9 2013
The advance decline percentages told a different story about the what investors were doing today. 50% of stocks were declining while 46% were advancing. 135 though made new 52 week lows while only 38 stocks made new highs. So there was some buying today as investors picked through the ashes of the last couple of days looking for bargains.
Market Direction Closing For Oct 9 2013
The S&P 500 closed at 1,656.40 up just 0.95. The Dow closed at 14,802.98 up 26.45. The NASDAQ closed at 3,677.78 down 17.06. IWM ETF fell 0.40 percent..
Market Direction Technical Indicators At The Close of Oct 9 2013
Let’s review the market direction technical indicators at the close of Oct 9 2013 on the S&P 500 and view the market direction outlook for Oct 10 2013.
For Momentum I am using the 10 period. Momentum is continuing to move to the downside.
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 the S&P 500 on Sep 30 which was confirmed Oct 1. MACD continues to move lower.
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 still negative with more room to fall..
Rate Of Change is set for a 21 period. It has continued to decline today indicating a growing lack of interest among buyers.
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. It is extremely oversold.
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 for tomorrow is down and it too is very oversold.
Market Direction Outlook And Strategy for Oct 10 2013
The Market Direction Technical Analysis indicators ontinue to show that the direction is lower. While I continue to look for signs of a rally that could sustain itself for more than a day or two, there are no signs other than an extremely oversold Fast Stochastic and Slow Stochastic to back up my outlook.
For tomorrow I am expecting the market direction to try to push higher but Fail. The direction remains lower.
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