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Market Direction Outlook For Sep 30 2013 – Month End

Sep 29, 2013 | Stock Market Outlook

Monday marks the end of another September. Unless there is a crash tomorrow, September 2013 will go into the history books as one of the better Septembers.  When August ended the S&P was at 1632.97. On Friday the S&P closed down at 1691.75 which is still a gain of 58.78 for a 3.5% return. Not bad for what is more often than not the worst month of the year for the bulls.

Market Direction For September 2013 Up 3.59%

You can see the month of September in the chart below. With just one day left this September is shaping up to be one of the best on record for the S&P 500.

Market Direction Sep 2013

Market Direction Action for S&P 500 for Sep 27 2013

You can see all the action from Friday in the 1 minute daily chart below. The market opened at 1695.52 and then promptly fell 8.37 points or half a percent by 10:00 AM. This is becoming the normal course for the market direction during this latest weakness. The market direction has constantly be putting in a morning low and then rallying back for much of the afternoon. Friday was a fairly strong see-saw type day with the market closing near the first morning drop.

Market Direction one minute chart sep 27 2013

Market Direction Morning Lows are Tradable

Throughout much of this market weakness the morning lows have become extremely profitable. Each morning the market has made its low. Even on Tuesday and Wednesday when the market direction shifted in the afternoon and pulled back (especially Tuesday) the morning lows have been very tradable. I have done trading for pennies strategies trades each morning and the results have been excellent. Each morning low I look for the Trading For Pennies strategy entry signal, buy calls and hang on for 15 to 25 cents. The best day was Tuesday when I earned 35 cents and Wednesday I picked up .28 cents. On 100 call contracts that’s $3500 and $2800 respectively.

market direction morning lows

Trading For Pennies Strategy Earnings

I have over the past year received a lot of emails from investors who are enjoying excellent profits from the Trading For Pennies Strategy. I thought this one from an investor new to the Trading For Pennies Strategy, which I received on Wednesday Sep 25 is a good sample of the types of trades being done.

“Just wanted to say hi and tell you I traded your Pennies Strategy today for the first time and it went very well.

I did a 169 Call 60 contracts at 2.17 sold at 2.27.  I did exactly as you laid out in your article.”

From Ira

60 contracts equals 6000 X .10 cents earns $600.00. Done daily this works out to $3000 a week. The present volatility within the market direction has been enough that these types of trades should be feasible. For the past two weeks the signals in the IWM ETF for the Pennies strategy have often been overly clear.

Advance Declines For Sep 27 2013

The advance decline numbers showed a bit of a different picture on Friday. While the market direction in the S&P 500 was more a see-saw, declining issues far outpaced advancers with 64% versus 32% advancing. New highs and new lows were exactly the same at 86 each.

Market Direction Closing For Sep 27 2013

The S&P 500 closed at 1,691.75 down 6.92. The Dow closed at 15,258.24 down 70.06.  The NASDAQ closed at 3,781.59 down 5.83. The Russell 2000 ETF, IWM was down just shy of half a percent.

Market Direction Technical Indicators At The Close of Sep 27 2013

Let’s review the market direction technical indicators at the close of Sep 27 2013 on the S&P 500 and view the market direction outlook for Sept 30 2013.

Market Direction Technical Analysis Sep 27 2013

For Momentum I am using the 10 period. Momentum is clinging to the positive side of readings but only barely.

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 buy signal on Sep 9 which was confirmed on Sep 10. I had commented in market direction intraday comments for Friday that the S&P needed to close above at least 1690 to not issue a sell signal. On Friday is closed just above 1690 and the MACD divergence is 0.14 almost but not quite a sell 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 negative.

Rate Of Change is set for a 21 period. The rate of change is the only indicator that continues to show that there is a lot of interest in buying stocks. It is trending sideways on Friday but quite positive.

For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is signaling that the market direction is down.

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. The Fast Stochastic is signaling that the market direction for Monday is lower.

Market Direction Outlook And Strategy for Sep 30 2013

For the final day of September 2013, the market direction lower still seems to have the upper hand. MACD is ready to issue a sell signal, momentum is ready to turn negative, the Fast Stochastic and Slow Stochastic are both signaling a lower market direction for Monday and the start of the week. The Ultimate Oscillator is negative. Only the rate of change is showing positive aspects to the market direction at present.

The Debt Ceiling Crisis

The unknown entity in the room is the debt ceiling crisis. As politicians continue to squabble the debt ceiling debacle can only get worse. This is probably what will drive the market direction lower for the start of the week. Any resolution is bound to push stocks higher but whether any kind of rally from a debt ceiling resolution can be sustainable is tough to call at this point.

For Monday I will be surprised if politicians can get their act together. It looks like a down day for Monday.

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