The market direction outlook for today was for stocks to be weak but still close positive. At 1:30 when writing this post, stocks are still poised to hold their recent gains despite being overbought and experiencing some weakness.
Market Direction S&P 500 Intraday For Dec 27 2013
For the last Friday of December and the last Friday of the year, the market direction is seeing some weakness as it combats an overbought condition. The movement sideways though is fine as the market continues to hold recent gains. Today’s market direction action is in the chart below. At the outset the market opened with a jump following yesterday’s strong gains. From there though, the weakness I spoke of yesterday after the close, became evident as stocks sold lower with profit taking. The push lower this morning broke through 1840 but held just below that level.
This brought in some buyers who looked at that dip as an opportunity. Still though the little rally failed and the market has been bouncing along the 1840.50 valuation ever since. I won’t be surprised to see the morning low be revisited but there still looks like enough strength to end the day with a small gain.
Advance Decline Ratio Mid-day
By 1:40 though declining issues were outpacing gainers with 57% of stocks falling and 41% gaining. But the number to watch at present is the number of new highs. At 1:40 there are 240 new highs and only 81 new lows. This tells us that the market direction up is intact and we are experiencing just weakness from the overbought market condition.
Intraday Outlook Into The Close
Into the close then, the outlook still looks like investors may see a positive close. Yesterday’s Weekly Initial Unemployment Insurance Claims came in at a very respectable 338,000 which indicates that the economy is still improving. Aside from rumors that in-store sales were poorer than expected this year, there are no numbers yet to back up that claim.
Overall then stocks look strong here and investors remain content to hold most positions and take only a few profits. Obviously investors are expecting better valuations shortly as the traditional Santa Claus rally is now well underway.
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