FullyInformed.com

Market Direction For 1st Week of December – Up But Cautious

Dec 2, 2012 | Stock Market Outlook

Market Direction during November saw a correction and a partial recovery. Friday saw the market direction waffle a bit as the market direction tried to push higher only to see the Dow up just  3.76 points, or 0.03 percent, to 13,025.58, the S&P 500 pretty well unchanged with a 0.23 rise to finish at 1,416.18 and the NASDAQ  dipped 1.79 points, or 0.06 percent, to end at 3,010.24.

For the entire month of November the S&P 500 recorded its smallest change in market direction since March of 2011 with a rise of just 0.29 percent. The Dow lost ground falling half a percent and the NASDAQ ended up gaining 1.1 percent for the month. This past week though saw the Dow almost unchanged at 0.1 percent gain, the S&P up just half a percent and the NASDAQ with the biggest gain, up 1.5 percent. The NASDAQ rise is understandable since it had fallen the furthest of the three indexes.

Market Direction and Fiscal Cliff

On Friday the markets should some resilience on the fiscal cliff issue as both Obama and Boehner spoke and yet the markets in general seemed to regard their comments as more political posturing than anything else. Trading though has remained choppy since the election and investors remained deeply concerned about the fiscal cliff, the chance of stocks selling off and the risk of missing another leg up.

Market Direction and VIX Index

Fear drives the stock market direction and right now the VIX Index does not appear to reflect the true underlying current in stocks. Instead the VIX Index is being swayed by the slight moves in the market direction up and down which is skewing the index and showing lower volatility than what is actually present. A narrow trading range is always a problem for the volatility index and investors need to be aware that there is an underlying current of weakness still with stocks. Investors remain concerned that the “bottom” could fall out of the market at present levels. A 20% correction from here would be deeply disturbing although I do not see such a correction on the immediate horizon.

Market Timing Technical Outlook

The market timing technical analysis has been accurate this year a little better than 75% of the time which is an excellent record. But 25% still leaves lots of room for market direction to not follow market timing technical analysis so it should be interesting going forward from here. On September 25 and September 26 the MACD signaled that the market direction had changed from down to up and was a perfect call on the recent downturn.

On November 21st and 23rd MACD has given a market direction up signal and it has not broken from that signal as of Friday November 30.In fact on Friday MACD continued to climb. Let’s review Friday’s market direction signals.

Market Direction for Nov 30 2012

 

For Momentum I am using the 10 period. Momentum is still solidly positive and continues to climb. Friday saw a flattening to the momentum curve but based on Friday’s action this is understandable.

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) is still climbing despite the market direction waffling here.

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 extremely overbought but in solid positive territory. NOTE that the second overbought reading is not nearly as strong as the first which could indicate indecision among investors and does reflect the lack of buying interest over the past two days from investors.

Rate Of Change is set for a 10 period. Rate Of Change is slightly down from Thursday which again reflects the same lack of buying from investors.

For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is overbought to the extreme. It however continues to signal market direction up but the extreme overbought signal could be a bit of a problem next week for the market direction to continue to push higher.

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 confirming the slow stochastic and sites in very overbought territory. The readings are still positive for market direction but the spread between the K period and D period is narrowing which often signals that market direction up is tiring which is what I posted on Thursday’s market direction outlook.

Market Direction Outlook For 1st Week of December

For the first week of December then the market direction remains higher but the market technical indicators are showing signs of tiring in the rally higher. The market direction though could jump higher on any solid positive signal on the fiscal cliff and this alone is what is keeping many investors in this market.

Market Direction Strategy

At this stage my market direction strategy is to stay cautious. I am still Put Selling against stocks but my interest is shifting more towards the stocks that are continuing to move higher like Home Depot stock, Visa stock, Scotiabank stock, Royal bank stock and the like. I am preparing for more positions on YUM Stock and will write an article on that stock shortly.

Market Direction then for the start of the week and month is for the market to grind higher but it is showing signs of weariness.

Internal Market Direction Links

Market Timing Articles Index

How I Use Market Timing

Understanding Short-Term Signals

Various Market Timing Systems

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 Fri Nov 22 2024 – Bullish and Higher But Dips Likely

Prior Trading Day Summary: Thursday was an exciting day as stocks like NVIDIA Stock (NVDA) and Palo Alto Networks (PANW) moved lower early in the day and dragged some stocks with them while at the same time stocks like Snowflake …

Morning Investing Strategy Notes for Thu Nov 21 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu Nov 21 2024 review the outlook now that we have earnings from NVIDIA, Palo Alto Networks, and others. Stocks discussed include NVIDIA Stock (NVDA), TQQQ, Snowflake Stock (SNOW), Palo Alto …

Stock Market Outlook for Thu Nov 21 2024 – Dip Likely Possible Lower Close

Prior Trading Day Summary: Wednesday saw another wild ride with the index opening and falling thanks in large part to stunning poor quarterly earnings from Target. It’s stock fell a staggering $33.16 for a loss of 21.41%. The stock closed …

Morning Investing Strategy Notes for Wed Nov 20 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed Nov 20 2024 review the outlook with a new confirmed down signal but other signals advising stocks could move higher. Stocks discussed today include Target Stock (TGT), NVIDIA Stock (NVDA), …

Stock Market Outlook for Wed Nov 20 2024 – Confirmed MACD Down Signal and NVIDIA

Prior Trading Day Summary: Tuesday saw markets open lower as investors fretted over the chance of an expanding Ukraine-Russia war. The Russian dictator threatened nuclear weapons while most analysts felt the danger was slim to none that any would be …

Morning Investing Strategy Notes for Tue Nov 19 2024

For FullyInformed Members the morning Investing Strategy Notes for Tue Nov 19 2024 review the outlook for stocks on Tuesday after the new technical down signal on Monday. There are a number of stocks discussed today including Applied Materials Stock …

Stock Market Outlook for Tue Nov 19 2024 – Unconfirmed MACD Down Signal

Prior Trading Day Summary: Monday saw continued pressure on stocks and a bounce attempt. The S&P traded 4.1 billion shares with 62% of all volume being traded higher and 57% of stocks advancing. The day ended with a 23 point …

Morning Investing Strategy Notes for Mon Nov 18 2024

For FullyInformed Members the morning Investing Strategy Notes for Mon Nov 18 2024 review the outlook for stocks following Friday’s drop and the loss for the week. There are a number of stocks discussed today including Applied Materials Stock (AMAT), …

Stock Market Outlook for Mon Nov 18 2024 – Choppy – Possible Bounce Attempt

Prior Trading Day Summary: For Friday semiconductor stocks were leading the markets lower. By the close the S&P was down 78 points to 5870. For the week the index lost 125 points as the post-election rally came to an end …

Morning Investing Strategy Notes for Fri Nov 15 2024

For FullyInformed Members the morning Investing Strategy Notes for Fri Nov 15 2024 review the outlook for stocks following a lower close on Thursday. There are a number of stocks discussed today including Walt Disney Stock (DIS), Applied Materials Stock …

Stock Market Outlook for Fri Nov 15 2024 – Choppy With Bias Lower

Prior Trading Day Summary: For Thursday I had expected the index to dip a bit deeper than previous but to recover and close flat to higher. Instead the index slipped lower especially with comments from Fed Chair Powell that were …

Stock Market Outlook for Thu Nov 14 2024 – Choppy – Dips Possible But Higher Close

Prior Trading Day Summary: On Wednesday stocks tried to climb but found ready sellers who took advantage of each jump higher in individual stocks. By the end of the day the SPX was up a point to close at 5985, …

Morning Investing Strategy Notes for Thu Nov 14 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu Nov 14 2024 review the outlook for stocks as weakness continues to dominate trading. There are a number of stocks discussed including Cisco Stock (CSCO), Walt Disney Stock (DIS), American …

Morning Investing Strategy Notes for Wed Nov 13 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed Nov 13 2024 review the outlook for stocks following a lower close on Tuesday. There are a number of stocks discussed including Spotify Stock (SPOT), Cisco Stock (CSCO), Walt Disney …

Subscribe For The Latest News