The market direction outlook for Wednesday Apr 29 was for stocks to move up just slightly. Instead stocks had a tough time as the GDP numbers pointed to a slowing economy. With stocks moving lower, the Federal Reserve came out with a statement which seemed to indicate that the expected rise in interest rates may be on hold until September at the earliest as the Fed quoted slowing economic numbers as a reason to stay cautious on interest rates. This helped stocks somewhat and they closed well off their lows.
Advance Decline for Apr 29 2015
Volume jumped higher on Wednesday by more than 500 million shares to 4 billion shares. 55% of all volume was moving lower but 44% was moving higher. New lows rose slightly to 24 and new highs fell slightly to 55. A lot of the volume entered the market following the Fed statement. Obviously there is a belief that stocks could be pushed higher by a delay in any Fed rate hike.
Market Direction Closings For Apr 29 2015
The S&P closed at 2,106.85 down 7.91. The Dow closed at 18,035.53 down 74.61. The NASDAQ closed at 5023.64 down 31.78.
Market Direction Technical Indicators At The Close of Apr 29 2015
Let’s review the market direction technical indicators at the close of Apr 29 2015 on the S&P 500 and view the market direction outlook for Apr 30 2015.
Stock Chart Comments:
The S&P broke through 2100 again today but recovered by the early afternoon and closed well off its lows. The 20 day simple moving average (SMA) is still moving higher and the index bounced off the 20 day for a second day.
Investors seem keen to pick up stock when the index pulls back to the 2100 level.
Support and Resistance Levels:
These are the present support and resistance levels.
2100 was very light support. Stocks will have to stay above it to change it back to solid support and convince investors that the market has staying power and will push well beyond 2100. That still does not appear to be the case.
2075 is light support. Below that is 2050 which is also light support. Stronger support is at 2000 which has repeatedly held the market up throughout each pullback in January and February.
Weak support is at 1970. Stronger support is at 1956.
1870 and 1840 are both levels with strong enough support to delay the market falling and should see a sideways action attempt while investors decide whether to sell or buy.
The other two support levels are 1775 and 1750. I have explained that these two are critical support for the present bull market. While 1775 is important it is 1750 that is the bottom line.
A break of 1750 would mark a severe correction from the most recent high. This would be the biggest correction since April 2012. A pull-back of that size would definitely stun investors and bring to question whether the bull market is finished.
Momentum: For Momentum I am using the 10 period. Momentum is now neutral and ready to turn negative if more selling starts.
MACD Histogram: 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 Apr 9 and that signal moved lower on Wednesday.
Ultimate Oscillator: 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 positive but moved lower on Wednesday.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change is turning lower and if stocks do not turn higher, the Rate Of Change may signal that a change in trend to down will start.
Slow Stochastic: For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic tries to predict the market direction further out than just one day. The slow stochastic is still pointing down for stocks and is overbought.
Fast Stochastic: 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 continuing to point down for stocks and it too is overbought.
Market Direction Outlook for Apr 30 2015
Despite the downturn today stocks still held the 2100 level and closed above it. There was not as much weakness in momentum intraday as you might expect given that the market direction was weak for almost the entire day.
The technical indicators are mixed with one neutral, two pointing lower and three still positive but weakening.
Overall though the direction could still be higher on Thursday especially with the Fed holding back on raising interest rates in June. This could put a floor under the present selling. For Thursday I think stocks have a chance to hold on and try once again to close higher.
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