Market Timing / Market Direction Up Down Situation

Today’s market direction was not solidly bullish. The market timing technicals though did improve slightly but remain decidedly negative. During the day three key events occurred. First bond yields in Italy soared. Second was the rumors that France’s debt ratings may be lowered. Third was the consumer confidence numbers which showed a great improvement over last month. The market moved back and forth as each piece of news hit the market. The NASDAQ was the most troubling of the markets today.

The NASDAQ chart below is not comforting as the market refused to climb. Instead it remained negative as stocks like Amazon and Apple fell. Since both of these stocks form a large part of the index, the NASDAQ had a hard time climbing.The chart below shows the NASDAQ still below the major important market timing moving averages of 50, 100 and 200 days.

Market Timing / Market Direction The Nasdaq For Nov 29 2011

Market Timing Indicators For The NASDAQ

One of the more interesting aspects of today’s market action is the market timing technical indicators for the NASDAQ. Below are three of my favorite market timing indicators. The Ultimate Oscillator remains negative but is up from Friday. Rate of Change is also negative but turning up. MACD (Moving Average Convergence / Divergence) is flattening out but look at how negative it is at -19.20. This is actually an improvement over the past two trading sessions.

Market Direction Cannot Improve Without The NASDAQ

All of these indicators, in particular MACD are reflecting the market direction pressure stocks like Apple Stock and Amazon Stock are causing as they remain weak. I believe it will be impossible for the overall markets to sustain any rally without the NASDAQ.

Market Timing / Market Direction Nasdaq Technical Indicators

Market Timing / Market Direction Indicators for the NASDAQ on Nov 29 2011

The NASDAQ lead almost the entire rally from the March 2009 market bottom and my market timing indicators were always clear. If they were positive than the markets were going to move higher and if the NASDAQ was negative, market direction was down. Despite Monday’s big rally, the NASDAQ is negative.

Market Timing Indicators From The S&P

The market timing indicators for the S&P improved slightly today but they remain very negative. The Ultimate Oscillator is at readings that so negative as to suggest that Monday’s rally was completely technical. Rate of Change (ROC) is still very negative although improved, but MACD continues to not confirm the rally from yesterday. Although the market direction was up for the S&P, it still has not broken through the 1200 level. Select this market timing link to learn the history of the Ultimate Oscillator.

Market Timing / Market Direction indicators for the S&P on Nov 29 2011

Market Timing / Market Direction Indicators for the S&P on Nov 29 2011

Market Timing / Market Direction for Nov 29 2011

While there was further good news this evening after the market closed, on auto sales and some good news from Home Depot and Lowes on Housing trying to bottom, the above market technicals all are warning that the market may easily turn back down. If the market does turn lower I believe it will easily fall beyond Nov 25th market low of 1158.66.

Investors are faced with an up/down market at this stage. They should hope that the market can regain the 1200 level otherwise, as you can see from the market timing indicators it would seem that a move lower could be the easier market direction for stocks to take.