Market Direction Outlook For Feb 13 2013 – Unchanged

Market Direction today ended up pretty well sideways with yet another small gain showing the bias remains to the upside. The Dow closed up above 14000 once again while the NASDAQ market direction slipped for the day.

Market Direction Action For Feb 12 2013

Probably one of the more interesting trades for today came from Avon Company. It’s stock has been hammered over the past 12 years and the recent slash of its dividend from 23 cents to 6 cents is indicative of the trouble Avon Stock is in. Avon Stock today those rose $3.51 or 20.31% in a dramatic rise to close at $20.79 on fourth quarter results that topped analysts estimates. However it was still a loss although the CEO said the earnings shows signs of stabilization.

avon stock one chart chart

One year daily chart of Avon Stock

The other stock that was interesting today was Apple Stock. Obviously many investors are starting to get upset over the lack of a recovery in Apple Stock. Today Tim Cook of Apple spoke about Apple’s $137 billion pile of cash in response to hedge fund manager David Einhorn’s demand that Apple should distribute some of its cash. With little hope of seeing $1000 any time soon let alone any time in the next 12 months investors are complaining louder than ever about the decline in Apple stock. Even today Apple Stock closed down another 2.5% to $467.90. It’s amazing how even the so-called “smart money” got suckered into Apple Stock and the dream of over $1000 in share valuation.

Market Direction Closings

The S&P 500 market direction closed at 1519.43, up 2.42 points and the Dow closed at 14018.70, up 47.46 points. The NASDAQ closed at 3186.49 down 5.51.

Market Direction Technical Indicators At The Close of Feb 13 2013

Let’s take a moment now and review the market direction technical indicators at today’s close on the S&P 500 and view the next trading day’s outlook.

Market Direction technical Feb 12 2013

Market Direction technical indicators for Feb 12 2013

For Momentum I am using the 10 period. Momentum is still positive and moving lower.

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) is still signaling market down. This is now more than 6 trading days with a sell signal in place by MACD. During this period since the market direction sell signal was issued, the S&P 500 has gained 23.72 points for a 1.58% increase.

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 still positive and very overbought.

Rate Of Change is set for a 21 period. Rate Of Change or the ROC indicator is still positive and it is now reflecting the sideways nature of the S&P 500 as it is almost unchanged each day.

For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is overbought to the extreme and is still signaling that market direction has still got some room on the upside left.

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 also extremely overbought but it is indicating that the market direction is sideways.

Market Direction Outlook And Strategy for Feb 13 2013

The market direction outlook for the next trading day s to see perhaps a weak start once again and probably a rally attempt after 10:00. The Fast Stochastic, rate of change, and momentum are basically indicating that the market will be moving sideways while the MACD indicator is signaling that the market direction remains down.

Market Direction and State of the Union Address

I watched the State Of The Union address this evening and I saw nothing presented that I believe will impact the market direction tomorrow or even in the near future. A lot of the political rhetoric was simply speech making but whether anything will come of it is hard to judge. At times I feel like the economy is trying to recover in spite of what government is attempting to do.

Market Direction tomorrow should not be impacted by the State of the Union Address. Instead stay nimble and look for opportunities. Once found, trade those opportunities but keep an eye on the exit strategies as it is obvious to me that while the market direction continues to remain higher, that could still change easily if the right catalyst should hit the stock markets.

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