S&P 500 Close to Issuing a Buy Signal

by Sam Collins | October 9, 2012 2:15 am

Despite a quasi-holiday mood, Columbus Day here and Thanksgiving in Canada, U.S. markets tracked European stocks lower. A late-afternoon rally failed and stocks closed modestly lower.

At Tuesday’s close, the Dow Jones Industrial Average was off 27 points at 13,584, the S&P 500 fell 5 points to 1,456, and the Nasdaq was down 24 points at 3,112. The NYSE traded 464 million shares and the Nasdaq crossed 276 million. Decliners edged out advancers by 1.5-to-1 on the Big Board and by 1.8-to-1 on the Nasdaq.

Nasdaq Chart
Click to Enlarge

Trade of the Day Chart Key

The Nasdaq has been weaker than the other indices lately, mostly due to the higher velocity nature of the index, which is populated with more speculative stocks. The most important initial support for the Nasdaq is the 3,100 line, which if broken, would probably cut through its 50-day moving average and fall to about 3,050. The MACD is still on a sell signal, but a positive day or two could result in a buy signal.

SPX Chart
Click to Enlarge

The S&P 500 and the Dow industrials (not shown) are bumping against multi-year highs. The S&P 500 is positive with initial support at 1,430 and then the 50-day moving average at 1,424. MACD is flat and very close to issuing a buy signal. Overall, the stock market has retained its constructive technical picture.

Conclusion: Although market activity Monday was slow with light volume, there was a nervousness to it, especially among the tech group. Q3 earnings kick off after the close today with a report from Alcoa (NYSE:AA[1]).

Analysts and companies have sliced their forecasts to minimum levels, and the troublesome thought that was repeated was, “What if these companies fail to meet the minimum forecasts?” The nasty response[2] of Apple’s (NASDAQ:AAPL[3]) stock to its recent, rather minor technical glitches with the iPhone 5 has investors on edge as well.

All would be well if the Dow and S&P 500 could get some steam going and break to new highs. Until then the bull is pacing.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here[4].

For a list of this week’s economic reports due out, click here[5].

  1. AA: http://studio-5.financialcontent.com/investplace/quote?Symbol=AA
  2. nasty response: https://investorplace.com/2012/10/trade-of-the-day-apple-nasdaq-aapl-6/
  3. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  4. click here: http://online.wsj.com/mdc/public/page/markets_calendar.html?mod=topnav_2_3024
  5. click here: http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

Source URL: https://investorplace.com/2012/10/daily-stock-market-news-sp-500-close-to-issuing-a-buy-signal/
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