The Market Direction Outlook for the S&P for Thursday Apr 16 2015 was for stocks to turn sideways under some selling pressure but to close positive. Everything happened as expected except the S&P closed slightly negative, down 1.64 on the day. With all three major indexes sitting near all-time highs on Wednesday at the close, some selling today had to be expected. Taking profits is a natural part of investing. The selling started from the open but was turned back up in the morning by dovish comments from Atlanta Fed President Dennis Lockhart who commented that the Federal Reserve should wait on raising interest rates. This help push stocks into positive numbers which by the close of the day had evaporated.
Advance Decline for Apr 16 2015
Volume dropped by 600 million shares on Thursday to 3.4 billion. Down volume was 60% of all trades executed and up volume was 39%. However there were 61 new highs and only 7 new lows. At this point, the new lows continue to point to the market as merely consolidating recent gains before another move higher commences.
Market Direction Closings For Apr 16 2015
The S&P closed at 2104.99 down 1.64. The Dow closed at 18,105.77 down 6.84. The NASDAQ closed at 5007.79 down 3.23..
Market Direction Technical Indicators At The Close of Apr 16 2015
Let’s review the market direction technical indicators at the close of Apr 16 2015 on the S&P 500 and view the market direction outlook for Apr 17 2015.
Market Direction Technical Analysis for Apr 16 2015
Stock Chart Comments:
The most significant event today was the close. The S&P candlestick at the close today was a doji-cross which is often bearish within a day or two. The accuracy rate for this candlestick since the start of the year has been roughly 70% within 2 days. A doji-cross is formed primarily as the open and close are almost identical and investors are undecided which direction to take stocks.
Support and Resistance Levels:
These are the present support and resistance levels.
2100 was very light support and is now resistance. Stocks will have to stay above it to change it back to support.
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 positive and back climbing.
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 rose again today.
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 and moving sideways.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is not moving higher but trending either sideways or slightly lower. This indicator is not signaling for the rally to continue.
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 up for stocks.
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 pointing up for stocks.
Market Direction Outlook for Apr 17 2015
The doji-cross candlestick at the close of the day is bearish for a couple of days out in time. That would mean bearish into Monday of next week. However aside from the Rate Of Change technical indicator, the indicators are in general positive for stocks. This means the market is looking at a mixed day again on Friday.
Investors should stay cautious and take on smaller than usual positions until the Market Direction decides which direction it wants to follow. In general however, even if there is more selling on Friday, the trend up remains in tact.
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