FullyInformed.com

Market Direction For Tuesday Oct 9 2012 Shows Selling Ahead

Oct 8, 2012 | Stock Market Outlook

Monday was fairly quiet as the bond market was closed for Columbus day and market direction basically spent the day with shallow losses. The IMF downgrade of Asia hit the market before the open and the stock markets wandered in the red for Monday. The NASDAQ is being pulled down by the decline in Apple Stock. This is why it is important for Indexes to be weighted better. With Apple Stock such a large component of the NASDAQ it has moved it both up and down over the past two years and I doubt that is going to change any time soon.

There is not a lot to report on market directionat the close today as it was a fairly quite day. This is an important week with earnings out of Alcoa tomorrow. The S&P 500 is expected to post a decline in overall profits for the first time in 11 quarters which with the indexes at elevated levels may be a significant problem for market direction to push any higher. Meanwhile Tuesday also marks the five-year anniversary of the record high closes of both the Dow and the S&P. The S&P is up 16 percent this year and is now 7 percent below its record high. The Dow meanwhile is up 11 percent and just 4 percent below its record high.

A number of market leaders like Apple Stock (AAPL) are declining and stocks that did lead earlier this year like Priceline Stock (PCLN) have not recovered their May highs. All of this is not lost of many investors who you can be sure are taking profits here and there and raising small amounts of cash. None of this is good news for a push higher in market direction which opens the windows to the possibilities of naked calls or call credit spreads. The problem is with no clear signs of a market top or a serious pullback yet in place, it is hard to sell calls at this point in the rally.

Probably the most interesting bit of news today was the announcement of prepaid debit cards for those without banks, by both Walmart and American Express. Walmart has for a number of years been trying to offer banking services. With the cash flow of Walmart Stores, it is not surprising they want to get into banking.

Market Direction Needs To Move Up

While the market direction presently remains intact for the short-term, Friday say a market direction high that almost reached the high of Sept 14. The market needs to push higher to keep this rally moving both short-term and for the mid-term. This is important to watch for. If the market sells here and breaks 1430 it will have set a new lower low and a new lower high. That could mark a turning point in the rally, so it definitely is something that should be watched.

Market Direction Needs to Move Higher

S&P 500 shows that the market direction needs to move higher

Candlestick Chart Analysis

The candlestick at the close for today was a black candlestick. The market opened higher than Friday’s close butit closed below Friday’s close. Friday already had a warning that a sell signal might be generated and today that sell signal came through.

Market Timing Technical Indicators For Market Direction

On the weekend I indicated that overall the market direction remains intact. Today’s news pressured the market and most have turned neutral to unchanged but the fast stochastic is warning that there is more selling ahead and MACD remains negative and did not confirm the Oct 5 high.

Momentum is neutral.

MACD remains negative and unchanged from Friday’s close. This shows the continued pressure on market direction.

Ultimate Oscillator is neutral.

Rate of Change is unchanged.

The Slow Stochastic is slightly bullish.

The Fast Stochastic is slightly bearish.

Market Timing Indicators for Market Direction

Market Timing Indicators are predominantly neutral to unchanged with fast stochastic indicating lower tomorrow.

Market Direction Summary for Oct 8 2012

The three most important indicators today are the slow stochastic, MACD Histogram and fast stochastic. The slow stochastic is telling me that the market should be higher later in the week. The Fast Stochastic is telling me there is selling to come either tomorrow or Wednesday. Meanwhile the MACD Histogram is confirming what the fast stochastic is advising about market direction, namely that market direction is about to move lower.

The outlook then is for more pressure to be on stocks for at least the start of the week. The slow stochastic is advising the market direction will be higher later in the week , but that could mean higher from a lower point if there is some selling headed our way Tuesday or Wednesday and that possibility could be influenced tomorrow when Alcoa kicks off earnings season. For Fullyinformed members I am finishing up the Trading For Pennies Strategy outline but tomorrow could be a great day for this strategy to be put to use, whether paper trading or risking actual capital.

Search

Select to view all results...

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Recent Outlooks

Stock Market Outlook for Wed Mar 27 2024 – Unconfirmed MACD Down Signal

Prior Trading Day Summary: I lost my power shortly after the markets closed. Articles this evening will be shorter if I can post any. On Tuesday trading volume picked up as stocks fell for another day. The SPX closed near …

Morning Investing Strategy Notes for Tue Mar 26 2024

For FullyInformed Members the morning Investing Strategy Notes for Tue Mar 26 2024 discuss the outlook for Tuesday. As well there are comments on support levels to watch in the SPX for the week. There are a number of trade …

Stock Market Outlook for Tue Mar 26 2024 – Still Bullish

Prior Trading Day Summary: On Monday low trading volumes hindered the chance of a positive close. The SPX saw just 3.4 billion shares traded. This matches the volume on last Friday. While poor , it is also bullish as it …

Morning Investing Strategy Notes for Mon Mar 25 2024

For FullyInformed Members the morning Investing Strategy Notes for Mon Mar 25 2024 discuss the outlook for Monday and the shortened week ahead of the Easter holiday. There are a number of trade ideas outlined including FedEx Stock (FDX), Nike …

Stock Market Outlook for Mon Mar 25 2024 – Dip Likely But Higher Close

Prior Trading Day Summary: On Friday investors took profits ahead of the upcoming shortened Easter week with indexes sitting at all-time highs. On Friday the SPX closed down just 7 points to 5234. For the week the index was up …

Morning Investing Strategy Notes for Fri Mar 22 2024

For FullyInformed Members the morning Investing Strategy Notes for Fri Mar 22 2024 discuss the outlook for Friday. There are a large number of trade ideas outlined including FedEx Stock (FDX), Nike Stock (NKE), Lululemon Athletica Stock (LULU),  and more …

Stock Market Outlook for Fri Mar 22 2024 – Choppy – Dips Possible But Still Up

Prior Trading Day Summary: On Thursday all 3 indexes closed at new all-time highs for a second straight day. Volumes remained decent but stocks are seeing some selling as investors are taking a few profits with the indexes at new …

Morning Investing Strategy Notes for Thu Mar 21 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu Mar 21 2024 discuss the outlook for Thursday following Wednesday’s FOMC interest rate decision and Fed Chair Powell’s news conference. There are a large number of trade ideas outlined including …

Stock Market Outlook for Thu Mar 21 2024 – Higher Still

Prior Trading Day Summary: On Wednesday the SPX, Dow Jones and NASDAQ indexes all closed at new all-time highs. Comments from Fed Chair Powell reaffirming 3 rate cuts in 2024 were still “on the table” was all that investors needed …

Morning Investing Strategy Notes for Wed Mar 20 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed Mar 20 2024 discuss the outlook for Wednesday and the latest FOMC interest rate decision. There are also a number of trade ideas outlined including Chewy Stock (CHWY), SPY ETF, …

Stock Market Outlook for Wed Mar 20 2024 – All About The Fed – Bullish

Prior Trading Day Summary: On Tuesday the morning started with a dip down to 5131 but buyers were waiting for the dip and volumes picked up. Deep dips in a number of big caps like NVIDIA Stock (NVDA) found ready …

Morning Investing Strategy Notes for Tue Mar 19 2024

For FullyInformed Members the morning Investing Strategy Notes for Tue Mar 19 2024 discuss the outlook for Tuesday following Monday’s rally and before Wednesday’s latest FOMC interest rate decision. There are also a number of trade ideas outlined including Chevron …

Stock Market Outlook for Tue Mar 19 2024 – Choppy Dips Likely But Still Up

Prior Trading Day Summary: On Monday investors took advantage of the past two weeks of weakness to jump back into stocks. By the close the S&P was up 32 points to close at 5149. The 32 points wiped out the …

Morning Investing Strategy Notes for Mon Mar 18 2024

For FullyInformed Members the morning Investing Strategy Notes for Mon Mar 18 2024 discuss the outlook for the third week of March. There are also a number of trade ideas outlined including Adobe Stock (ADBE), Chevron Stock (CVX), Exxon Mobil …