The market direction today certainly surprised me. My market timing technical indicators had pointed to weakness to start the first week of October. Instead the market jumped on what was released as good economic news as far as increased consumer spending was concerned. The market also applauded the EuroZone PMI figures which I discussed in my Intraday market comments.
Suffice to say the PMI numbers show that the EuroZone is contracting not expanding. But let’s leave all this to the Intraday and end of day market comments and look at the market direction after such a disappointing day as today.
Market Timing Technical Indicators On Market Direction
My market timing technical indicators for the close of Friday last week showed a market in the state of decline. Not large but a decline nonetheless. This turns out was not what happened today, although the rally today certainly did fizzle out.
Momentum is climbing from Friday but is still negative.
MACD is continuing to decline further into negative territory. This bears watching.
The Ultimate Oscillator continued to fall today and ended up in oversold territory.
Rate Of Change is still negative despite today’s big swing higher.
The Slow Stochastic is positive while the fast Stochastic is bullish short-term as well. This could be signaling a rise in stocks for tomorrow and even out to Thursday.
Market Timing Indicators for Oct 1 2012
Market Direction Summary for October 2 2012
The consensus among the majority of the market timing indicators is still down but I think the Fast Stochastic may be signaling a market direction change to the upside. It should be interesting to see what transpires over the next couple of days. Friday’s technical tools were all negative whereas today’s technical tools have two that are bullish.
Normally though a pullback like we saw in today’s rally is followed by more selling from investors. There is nothing like a one day decline from a big Intraday rally to spook investors. Normally there is some additional downside to come. That means taking my time with Put Selling against my favorite stocks just in case stocks move a bit lower than I had expected.