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Stock Market Forecast Wednesday December 22, 2010

|Includes: SPDR Dow Jones Industrial Average ETF (DIA)
 
Stock Market Predictor: MktMetrics.com

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Tuesday 12-21-10 DJIA Closed: 11533.16 +55.03 vs. prior day: 11478.13 -13.78
DJIA 21-Day Moving Average: 11323.44 +15.70 vs. prior day: 11307.74 +14.13
DJIA Closed: 1.85% Above its Rising 21-day Moving Average vs. prior day: 1.51%
(Historic High Above: 10.56% 3-26-09 vs. Historic Low Below: -26.03% 5-7-10)

Before the New York Stock Exchange Open
Wednesday December 22 "Stock Market Forecast."

Probability Percent of "Up" at the Close
MktMetrics DJIA Probability of being "Up" Wednesday: 32%
Past 55 weeks: 55 Wednesdays, 58% have been "Up-on-the-day."

DJIA Trend Change to "Down" from "Up" initiated 12-20-10
DJIA Outlook Change to "Up" from "Down" initiated 12-2-10
(DJIA Trend is more volatile, often a forerunner to the DJIA Outlook)

DIA Rating Change to "Buy" from "Sell" initiated 12-1-10

Dow Jones Industrial Average & DIA Statistics (Historic High / Low)
Dow 30 + DIA: Unch 24 vs. Down 7 (-0 vs -2 Prior day) (Sell 12-6-10)
DIA M/A Trend: Rose 8-day 114.87U vs. 21-day 113.34U Spread= +1.53 vs. Prior day +1.51 (Historic High: +4.31 3-27-09 / Low: -11.12)
DJIA Trend: Unch 77% vs Prior 77% (Historic: High 100% 3-31-09 / Low 0%)
DJIA Linear Regression: Rose Current .065 vs. Prior .063 (Turned up: 11-1-10) (Historic: High +.463 1-22-10 / Low -.478 4-9-09)
DJIA Momentum: Rose Current 84% vs. Prior 81% (Historic: High 94% 9-9-09 / Low 0%)
DJIA Volatility: Fell 0.44 vs. Prior 0.76 (Historic: High 9.80 / Low -3.80 5-13-10)
DJIA Up-Vol. minus Down-Vol: (Buy 12-2-10), Current ROC -3.04%U vs. Prior -3.83%D, Annual ROC 8.52%U vs. Prior 7.63%D (High 28.18% / Low -5.78%)
DJIA 5-Day Stochastic d%: Fell 64 vs. Prior 66 (High 100 / Low 0)
DJIA 20-Day Stochastic d%: Unch 90 vs. Prior 90 (High 100 / Low 0)
DJIA 50-Day Net Change: Rose +513 vs. Prior +468 (Historic: High +1957 5-18-09 / Low -3881 3-10-08)

DJIA Resistance Levels: Mean= 11323.44 / Intermediate Term 11521.62 / Breakout 11719.80

DJIA Support Levels: Mean= 11307.74 / Intermediate Term 11117.42 / Breakdown 10927.10

Institutional Investor Statistical Trends (Historic High / Low)

S&P 500 VIX Short-Term Futures ETN ("Inverse Fear Index")
VXX: Rose Current -.50 vs. Previous day -.54 (High 1.43 11-30-10 / Low -.89 1-11-10) Definition: greater than 1.0% Bearish / less than 1.0% Bullish

McClellan Oscillator: Rose Current 48.18 vs. Previous day -5.91 (High 300.19 7-26-10 / Low -426.47 5-20-10) Mean= -63.14 Closed above its Mean, Positive and increasing.

Summation Index: Rose Current 2312.21 vs. Previous day 2264.03 (High 5599.98 9-22-09 / Low -4699.43 3-9-09) Mean= 450 Closed above its Mean, positive yet decreasing.

NYSE Composite Breadth: Current Advances 2126 vs. Declines 935 / Previous day Advances 1516 vs. Declines 1553, (Buy 12-21-10).

Exchange Insiders' Inventory: Fell Current .12 vs. Previous day .14 (High .30 8-5-09 / Low -.31 3-9-09) Mean= -.01 Closed above its Mean, positive yet decreasing.

Institutional Money Flow: Fell Current 77% vs. Previous day 77% (High 100% 7-28-09 / Low 0% 3-9-09/7-6-10) Mean= 50% Closed above its Mean, positive yet flat.

Institutional Demand: Rose Current 78% vs. Previous day 77% (High 89% 7-28-09 / Low 6% 11-20-08 Mean= 47% Closed above its Mean, Positive and increasing.

Institutional Inventory: Unch#3 Current 74% vs. Previous day 74% (High 85% 7-27-09 / Low 6% 10-10-08) Mean= 46% Closed above its Mean, positive yet flat.

Institutional Accumulation/Distribution Trend: Fell Current 0.19% vs. Previous day 0.20% (High +.52% 8-10-09 / Low -.77% 10-10-08) Mean= -.21% Closed above its Mean, positive yet decreasing.

Outlook Statistics: Above 50% Bullish / Below 50% Bearish (Historic High/Low)

DJIA Outlook: Bullish, Unch#4 Current 82% vs. Previous day 82% (High 96% 7-28-09 / Low 2% 3-11-09) Mean= 49.0% Closed above its Mean, Positive yet flat.

Stock Market Outlook: Bullish, Rose Current 98.8% vs. Previous day 97.5% (High 100% 8-21&9-16-09 / Low 1.8% 11-20-08) Mean= 50.7% Closed above its Mean, Positive and increasing. (Dow 30, S&P 500, Russell 2000 & NASDAQ 100 combined)

12 Key ETFs: Above 0% Bullish/Below 0% Bearish (Historic High/Low)
DIA: Rose Current Trend 40% vs. Yesterday 37% (High 102% / Low -159%)
SPY: Unch Current Trend 51% vs. Yesterday 51% (High 95% / Low -192%)
MDY: Rose Current Trend 79% vs. Yesterday 75% (High 132% / Low -246%)
IWM: Rose Current Trend 52% vs. Yesterday 49% (High 80% / Low -133%)
QQQ: Rose Current Trend 24% vs. Yesterday 21% (High 65% / Low -85%)
SMH: Fell Current Trend 12% vs. Yesterday 16% (High 63% / Low -60%)
IYT: Rose Current Trend 25% vs. Yesterday 23% (High 102% / Low -134%)
XLE: Unch Current Trend 48% vs. Yesterday 48% (High 82% / Low -131%)
XLF: Rose Current Trend 22% vs. Yesterday 20% (High 50% / Low -59%)
IAI: Rose Current Trend 45% vs. Yesterday 40% (High 55% / Low -67%)
IYR: Unch Current Trend 18% vs. Yesterday 18% (High 90% / Low -146%)
XHB: Unch Current Trend 47% vs. Yesterday 47% (High 69% / Low -56%)
MktMetrics.com tracks 125 Exchange Traded Funds for its Subscribers.

Stock Market Plurality: Daily short-term overbought/oversold momentum indicators, look for extremes either way in the following information provided.
100 “High” vs. 0 "Low" Demand Factor of 1,000 Stock Universe (Historic High/Low)
Demand Factor "100": Rose 171 vs. Previous day 20 (High 494 12-3-10) & (High 546 9-16-09 / Low 0 11-20-08)
Demand Factor "0": Rose 15 vs. Previous day 3 (High 458 10-10-08 / Low 0 8-21-09)
DJIA Inverted Breadth Index: Fell Current -.09 vs. Previous day -.12 (High: 1.14 12-8-10 / Low -1.44 7-21-10)
DIA MACD: (Buy 12-3-10) Rose Current 0.92 vs. Previous day 0.90 (High 1.52 10-14-10 / Low -2.18 6-9-10)
DIA 14-Day Relative Strength: Overbought (Sell 12-14-10) Current +81 vs. Previous day +87 (High 100 3-19-10 / Low 0 7-6-10)
DIA Commodity Channel Index: Rose Current +105 vs. Previous day +58 (High 306 11-4-10 / Low -318 5-6-10)

DIA ATR 14: Current 1.01 vs. Previous day .99 (High +3.56 5-6-10 / Low -.87 4-15-10) (A True Range 14 Period, is often used for stop buy/stop-sell consideration from the previous day's DIA Close or, the current trading session's High/Low.)
Compare the DIA ATR 14 Period to the MktMetrics DIA "Proposed Range," Current .84 vs. previous .71 representing MktMetrics DIA True Range 6 Period. (Caveat: When the MktMetrics "Proposed Range" becomes lower than 0.80, it typically means a large volatility day, the next day, generated from investor complacency or uncertainty.)

DIA Sentiment: DIA Put/Call Ratio, Current 1.07 vs. Previous day 1.53 (The put/call ratio works well in conjunction with overbought/oversold indicators such as McClellan Oscillator, DIA 14-Day Relative Strength Index and Commodity Channel Index. Definition: A reading 0.80 or below is very Bullish, a reading 1.20 or above is very Bearish)(High: 2.05 12-16-10 / Low: .55 7-6-10.

Good luck and Good trading Wednesday!


Disclosure: I am long INTC, MU, ATML.