The market direction outlook for Thursday was for consolidation but a green close. We got the consolidation but only the Dow closed in the green. The S&P and NASDAQ were close but the jump on Wednesday was probably too strong for investors to digest and keep pushing higher. Today’s economic numbers were not quite as rosy. In particular the housing re-sales were lower again marking the third month in a row of declining numbers. While never a good sign it does show that interest rates have moved up since the Fed started talking about tapering even without the tapering taking effect. I did quite a few trades today and posted them to my twitter account as I did them. Unfortunately I seem to have picked up a bit of a bug and am under the weather today and was unable to post my trades, but will bring everything up to date tomorrow. My market direction outlook will also be shorter tonight.
Market Direction S&P 500 Intraday For Dec 19 2013
Today’s market action followed what I wrote in my article on 8 trade ideas for after the Fed news. The market sold off from the outset and pushed lower. I did almost all of my trades outlined in the 8 trades article, here in the morning weakness. From there the market moved higher all day and tried to close at a new high. The close though fell short as investors took profits in the last few minutes of the day. Still though the market looked good direction wise.
Advance Declines For Dec 19 2013
57% of stocks declined today with 40% advancing. There were though 171 new highs which was lower than yesterday’s 192 new highs and 123 new lows which was more than yesterday’s 118 new lows. All in all, these numbers show consolidation more than anything else.
Market Direction Closings For Dec 19 2013
The S&P closed at 1890.60 down just 1.05. The Dow closed at 16,179.08 up 11.11. The NASDAQ closed at 4058.13 down 11.93.
The IWM ETF closed at 112.04 down 0.84 cents.
Market Direction Technical Indicators At The Close of Dec 19 2013
Let’s review the market direction technical indicators at the close of Dec 19 2013 on the S&P 500 and view the market direction outlook for Dec 20 2013.
The most important support line in the S&P 500 at this time in the ongoing rally is still 1750. That support line is holding the market direction up at present and that has not changed. The second support level of 1780 is very light support and was easily broken last week. At present there is no support of any strength above 1780.
For Momentum I am using the 10 period. Momentum has been the best indicator during this recent correction. Momentum is back positive after yesterday’s big rally and is higher again today.
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) issued a weak sell signal on Friday Nov 29 when MACD was slightly negative. MACD took a big jump higher yesterday and is still negative today although it is nearing a buy signal.
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 overbought for the second day.
Rate Of Change is set for a 21 period. The Rate Of Change is positive for the second day and continues to show strength.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic issued a buy signal on Wednesday and is still indicating that more upside lies ahead for early next week.
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. Yesterday the Fast Stochastic issued a buy signal. It is now overbought but continues to point to a higher day tomorrow.
Market Direction Outlook And Strategy for Dec 20 2013
Today was basically a day to consolidate yesterday’s gains. For FullyInformed Members I followed up on most of the stocks in my article from last night on the 8 trade ideas. I did most of my trading in the early morning when the market fell.
At the close today the Market Direction Technical Analysis is still showing a consensus of a higher day for Friday. I am not expecting anything major but I am expecting a positive close on Friday. It was nice to see the market not give back the gains from yesterday. That was an important step for the next leg higher in stocks.
I have not altered my strategy and am now placing more capital back into the market. I am closing trades when the opportunity arises to lock in gains, such as my Apple Stock bi-weekly Put Selling strategy which FullyInformed Members can check out.
For tomorrow then I am looking for more consolidation but also a higher close.
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