The anticipated rally from last night’s market direction outlook is underway although as of 2:00 when I am writing this, the rally is slowly deteriorating. Nonetheless I think the rally could stay in the green for the closing. The most important aspect of this rally for the S&P 500 is trying to get back to the 1700 level and hold it.
Market Direction Action Intraday for Sep 26 2013
Today’s intraday 1 minute chart of the &P 500 is below. The morning saw the market open higher and push quickly back up through 1700 and then by about 10:30 the rally was in jeopardy. By 11:00 AM the market had given back a lot of the rally and was back down to the 1694 level. Another drive back toward 1700 failed in the early afternoon and now at the time of writing this market direction update the 1694 level is being tested again.
We could see another rally off the 1694 but the S&P 500 really must recapture 1700 to get momentum back to the upside. A catalyst for this could easily be a resolution to the debt ceiling debate. That though could be next week and not tomorrow.
Intraday Market Direction Oversold
Much of the movement up today is also being caused by the technical oversold condition of the market direction which the Ultimate Oscillator was signaling yesterday. As well the rate of change at the close yesterday was signaling that a trend change was possible which we are seeing today. Finally, 5 days of selling will often on its own create an up day as traders jump in to take advantage of short-term weakness in specific stocks.
Market Direction Outlook Intraday
Intraday the market direction outlook is still weak but there remains an underlying strength as the VIX Index continues to reflect a lack of fear among investors. You can see in the daily VIX Index chart below that the $13 and $14 levels have been frequently recently and the most recent high in the VIX Index is holding stead between $14 and $13 despite the S&P 500 falling below 1700. Obviously a lot of investors believe the latest weakness is temporary.
Market Direction Close Today
For the close today I am looking for the waffling in the market direction to continue but today I think the market direction may hang on and close in the green for the first day in 5 trading days. This could set tomorrow up for a green start but right now this bounce is almost all technical in nature. I’ll know more when I look at the market direction technical analysis at the close of the day.
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