FullyInformed.com

Market Direction Outlook For Feb 22 2013 – Finally A Correction

Feb 21, 2013 | Stock Market Outlook

Market Direction today is following the course charted last night by the market direction technical indicators. Lots to talk about so let’s jump right in.

Market Direction and Unemployment Numbers

The Weekly Initial Unemployment Insurance Claims jumped 20,000 last week rising to 362,000. Anything above 370,000 and the stock market direction has tended to sell lower. While many economists felt that the numbers would be revised lower in coming weeks, these numbers do show that hiring is still on the slow side. Even the four-week average which many point to as being far less volatile were up 8,000 to 360,750 which is the highest in 6 weeks. Basically since the start of November employers have added about 200,000 jobs a month which is up from 150,000 from the August to October 2012 period. Any further signs of numbers rising though could hurt the chance of a market direction rally higher into March or April so this bears watching.

Market Direction and Retail Numbers

Meanwhile more and more retailers are lowering forecasts and adjusting their marketing plans as higher taxes and fuel costs may impact consumer spending more than originally anticipated. Earlier this week Walmart Stores had rumors of a worst month than expected due to payroll tax increases. All of this may put a road block in front of a push higher in the overall stock market direction. Walmart bounced considerably higher but I am staying with my puts and watching closely for any serious pullback to close and move my naked puts lower especially if the market direction turns lower.

Market Direction and Stock Bargains

There were a number of great bargains on the market’s today thanks to the market direction push lower. I sold puts against Nucor Stock which fell dramatically, Dupont Stock, and Apple Stock was excellent throughout the day and I did a number of puts on Apple Stock.

S&P Market Direction Feb 21 – 5 minute chart

The S&P 500 dropped at the open and broke 1500 twice during the day. Toward the close the S&P 500 managed to regain the morning open after the initial collapse which is a good sign, but it closed lower. Nonetheless the market direction still looks decent as the S&P fought to retain the 1500 level.

Market Direction SPX Feb 21 2013

Market Direction SPX 5 minute chart for Feb 21 2013

Market Direction Closings

The S&P 500 closed at 1502.42 down 9.53 points and the Dow closed at 13,880.62 down 46.92 points. The NASDAQ closed at 3131.49 down 32.92.

Market Direction Technical Indicators At The Close of Feb 21 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 analysis Feb 21 2013

Market Direction technical analysis Feb 21 2013

For Momentum I am using the 10 period. Momentum is snow negative but only slightly which could easily be turned back up with a market direction bounce tomorrow.

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 flashing the sell signal and the divergence is widening indicating more selling ahead and market direction lower.

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 but barely. Yet despite the selling and the breaking of the S&P 500 the Ultimate Oscillator has managed to hang on while the market direction fell back below 1500.

Rate Of Change is set for a 21 period. Rate Of Change is still positive which is also decent considering the collapse in the market direction today. This could signal that selling may be a bit overdone and may turn sideways with a bias back to up.

For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic has no such outlook for the market direction up to possibly be recovered. Indeed it is pointing to the market direction being lower into the start of next week.

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 almost oversold and is nearing bounce readings for the market direction to push back up tomorrow. Meanwhile though the readings are bearish and indicate that market direction may bounce but the trend remains for market direction to turn lower.

Market Direction Outlook And Strategy for Feb 22 2013

The market direction outlook for tomorrow is for a possible technical bounce after two days of selling and then for the market direction to continue selling lower. The bounce back tomorrow would be technical in nature and I will not be chasing any stocks. If there is a bounce I will only be Put Selling against my favorite stocks that sell lower.

As the market direction Technical Analysis indicates that the market direction overall is still lower I see no reason to get all more naked puts working yet. Instead any puts that can be bought and closed for profits in a bounce are the best possible trade should we see a bounce in Market Direction. After that I will be back Put Selling as stocks move lower.

I noted that Doug Harris with his market direction portfolio adjusted his position twice today. FullyInformed Members might want to check out his comments for today.

Remember that a correction is long overdue for the market direction but that does not mean it will last weeks. Don’t fret the articles out talking about how this is the worst downturn since the rally started. That’s hardly obvious. Instead remember that this is a bull market that has had a terrific run-up and like all run-ups, it over extended itself.

The market direction correction may only last a few days before the market direction turns back up. However there must be a further catalyst to push stocks above the latest 5 year highs and until I see such a catalyst appear I believe the strategy of staying cautious, trading in small positions, closing when profits appear, looking for new opportunities and keeping cash at the ready remains the best way to stay invested at this time

Internal Market Direction Links

Profiting From Understanding Market Direction (Articles Index)

Market Timing Articles Index

How I Use Market Timing

Understanding Short-Term Signals

Various Market Timing Systems

Market Direction Candlestick Daily View (Members only)

Market Direction Portfolio Ongoing Trades (Members only)

Market Direction External Links

Market Direction IWM ETF Russell 2000 Fund Info

Market Direction SPY ETF 500 Fund Info

.

 

Search

Select to view all results...

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Recent Outlooks

Stock Market Outlook for Thu Mar 28 2024 – Choppy – Dips Likely – But Higher

Prior Trading Day Summary: On Wednesday investors returned and snapped up stocks that had drifted lower. The SPX bounced at the open and by the close it was up 45 points to close at 5248. The NASDAQ rose 83 points …

Morning Investing Strategy Notes for Wed Mar 27 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed Mar 27 2024 discuss the outlook for Wednesday and comments on a possible correction and what it might entail. There are a number of trade ideas outlined including FedEx Stock …

Stock Market Outlook for Wed Mar 27 2024 – Unconfirmed MACD Down Signal

Prior Trading Day Summary: I lost my power shortly after the markets closed. Articles this evening will be shorter if I can post any. On Tuesday trading volume picked up as stocks fell for another day. The SPX closed near …

Morning Investing Strategy Notes for Tue Mar 26 2024

For FullyInformed Members the morning Investing Strategy Notes for Tue Mar 26 2024 discuss the outlook for Tuesday. As well there are comments on support levels to watch in the SPX for the week. There are a number of trade …

Stock Market Outlook for Tue Mar 26 2024 – Still Bullish

Prior Trading Day Summary: On Monday low trading volumes hindered the chance of a positive close. The SPX saw just 3.4 billion shares traded. This matches the volume on last Friday. While poor , it is also bullish as it …

Morning Investing Strategy Notes for Mon Mar 25 2024

For FullyInformed Members the morning Investing Strategy Notes for Mon Mar 25 2024 discuss the outlook for Monday and the shortened week ahead of the Easter holiday. There are a number of trade ideas outlined including FedEx Stock (FDX), Nike …

Stock Market Outlook for Mon Mar 25 2024 – Dip Likely But Higher Close

Prior Trading Day Summary: On Friday investors took profits ahead of the upcoming shortened Easter week with indexes sitting at all-time highs. On Friday the SPX closed down just 7 points to 5234. For the week the index was up …

Morning Investing Strategy Notes for Fri Mar 22 2024

For FullyInformed Members the morning Investing Strategy Notes for Fri Mar 22 2024 discuss the outlook for Friday. There are a large number of trade ideas outlined including FedEx Stock (FDX), Nike Stock (NKE), Lululemon Athletica Stock (LULU),  and more …

Stock Market Outlook for Fri Mar 22 2024 – Choppy – Dips Possible But Still Up

Prior Trading Day Summary: On Thursday all 3 indexes closed at new all-time highs for a second straight day. Volumes remained decent but stocks are seeing some selling as investors are taking a few profits with the indexes at new …

Morning Investing Strategy Notes for Thu Mar 21 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu Mar 21 2024 discuss the outlook for Thursday following Wednesday’s FOMC interest rate decision and Fed Chair Powell’s news conference. There are a large number of trade ideas outlined including …

Stock Market Outlook for Thu Mar 21 2024 – Higher Still

Prior Trading Day Summary: On Wednesday the SPX, Dow Jones and NASDAQ indexes all closed at new all-time highs. Comments from Fed Chair Powell reaffirming 3 rate cuts in 2024 were still “on the table” was all that investors needed …

Morning Investing Strategy Notes for Wed Mar 20 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed Mar 20 2024 discuss the outlook for Wednesday and the latest FOMC interest rate decision. There are also a number of trade ideas outlined including Chewy Stock (CHWY), SPY ETF, …

Stock Market Outlook for Wed Mar 20 2024 – All About The Fed – Bullish

Prior Trading Day Summary: On Tuesday the morning started with a dip down to 5131 but buyers were waiting for the dip and volumes picked up. Deep dips in a number of big caps like NVIDIA Stock (NVDA) found ready …

Morning Investing Strategy Notes for Tue Mar 19 2024

For FullyInformed Members the morning Investing Strategy Notes for Tue Mar 19 2024 discuss the outlook for Tuesday following Monday’s rally and before Wednesday’s latest FOMC interest rate decision. There are also a number of trade ideas outlined including Chevron …