The outlook for Market Direction today was for the market to move lower. Technically I was not expecting anything in the way of a big move either up or down but definite weakness. Instincts though told me that the market direction wants to bottom here today and try to push back higher. This morning retail sales were good and beat most estimates. Yesterday Home Depot (HD) provided a very nice revenue outlook and certainly beat the estimates in revenue and earnings. This morning it was Deere and Company (DE) who provided excellent revenue and their forward statement looked quite good for 2014. Both of these companies are telling us that their markets are remaining stable.
On the other hand this keeps concerning investors worried that the Fed could start scaling back Quantitative Easing. Good news is met with concern and bad news with belief that liquidity will continue. Eventually the Fed will have to scale back even if by just a little. Personally I have no idea when that will happen and reading through the various Federal Reserve comments and notes, it would appear they do not have any idea as well.
Market Direction Outlook Intraday – 1 Minute Time Chart
The one minute intraday chart for the S&P 500 shows just how erratic stocks are and how nervous investors are. This morning we had two morning lows. Then a rise of now quite half a percent as investors pushed back and raced the S&P up to 1795.72. The problem was this brought in more selling as investors look at 1800 as a milestone of sorts. Many are taking small profits. I discussed this, earlier today on the members site. As long as the profit taking stays small the market can try to regain its footing here. After that rise this morning it sold off again and then turned choppy as it tries to regain 1793.
Market Direction Into The Close for November 20
Overall the market direction into the close looks erratic at best. The market at lunch hour is exhibiting the higher lows that we need to see for it to push back up, but it also needs to break free of 1793 and 1795 to mount another push to the 1800 level. My bet is that it will happen, but perhaps not this week. Meanwhile though the technicals disagree with my bet and are showing more strength building for more selling.
Intraday Market Direction Technical Outlook
Looking at the technical indicators today around 1:00 PM momentum is still hanging on but MACD is practically issuing a sell signal. The Ultimate Oscillator is still positive but you can see how much it has moved lower. The rate of change is moving back up slightly which shows there is some buying going on. Obviously some buyers are picking away at stocks this morning.
The Slow Stochastic is signaling that stocks will be lower by the end of the week.
The Fast Stochastic though while signaling stocks are still heading lower, has a nice bow forming and the D% reading has pushed down nicely this morning and is not as extreme as it was at the close yesterday. Part of this is because there is some buying going on, but perhaps there is less pressure to the downside than there was at the close last night.
As explained in my investing comments to members this morning. All it takes here is for small amounts of selling to grow to larger volumes and we will have the start of a correction. The market direction technical indicators cannot predict the size of any move lower at this point. They are simply warning that stocks are getting weaker each day. We have seen this before and I will post another article on it. Today though is a crossroads of a sort. The close then I see the S&P remaining weak but I do think investors want to hang on here so we could see a close around 1790 on the S&P. The problem is sellers have the upper hand at the moment and while they are not unloading a lot of positions they are taking profits as many are preparing for a possible change in trend.
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