Market Direction Outlook For Jan 16 2013 – Waiting On The Banks

Market Direction was interesting today. Yesterday I had written how I thought there would be a jump higher at the open and then a drop back followed by a push higher in the afternoon to close higher than Monday’s close. The opposite happened. The open saw a swift decline in market direction and the rest of the day the S&P and Dow market direction clawed its way higher to close above Monday’s close. The NASDAQ market direction was negative all day thanks to Apple Stock and HP Stock.

Market Direction Action Jan 15 2013

The big news in tech stocks today had to be Dell again as it appeared there might some truth to the privatization rumor. Dell Stock continued to rise today moving up another 7.2%. Market direction was on hold though for much of the day as investors wait for Wednesday when earnings come out for Goldman Sachs and JP Morgan along with GE later this week.

Meanwhile Fitch Ratings reported again that a debt ceiling delay could lead to a review of the AAA credit rating the US has. On other economic news Ben Bernanke indicated that he was unconcerned about inflation from the bond buying programs and retail sales rose half a percent while producer prices were off 0.2%. After this announcement came the news that manufacturing in the New York region contracted slightly in January.

Market Direction Closings

The S&P 500 closed up 1.66 to 1472.34 while the Dow was up 27.57 to 13,534.89. The NASDAQ fell 6.72 points to 3110.78 faced with the drop of Apple Stock along with the pullback in HP Stock. Microsoft Stock means climbed 1.2% making it the biggest gainer among the blue-chips.

Market Direction Technical Indicators of Jan 15 2013

Let’s take a moment now and review the market direction technical indicators at the close of today on the S&P 500.

Market Direction Jan 15 2013

Market Direction Jan 15 2013

For Momentum I am using the 10 period. Momentum is still solidly positive. Today momentum continued to climb reflecting the continued market direction push higher during the day. This is almost a carbon copy of yesterday. This is a bullish indication on market direction.

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 positive and while pulling back a bit further today there is no sign from MACD that advises that there is any concern on market direction in the mid-term not moving higher.

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 is back climbing into overbought territory.  The previous overbought high in the Ultimate Oscillator was 77.46 on Jan 7. Today’s reading is at 80 showing the continued purchasing among investors. Investors are using these dips in stocks to keep adding to their portfolios.

Rate Of Change is set for a 21 period. Rate Of Change is still positive and and is still moving higher. This is a signal that market direction is going to push higher still.

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 while the signal is market direction higher, it is actually closer to market direction sideways. As the Slow Stochastic looks out beyond a single day, we could see the market direction turn sideways by week’s end.

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 and yet still signals that market direction remains higher.

Market Direction Outlook And Strategy

The market direction outlook for Wednesday January 16 2013 is to see perhaps a weak start but the overall market direction is higher. The general consensus among the technical timing indicators is for stocks to continue to move higher. If earnings tomorrow are poor out of the banks, this could stall the rally or even stop it. Right now though investors are giving the benefit of the doubt to earnings surprising to the upside. If Wells Fargo earnings were any example, investors may be disappointed with bank earnings tomorrow.

Presently then the market direction remains up but there should be lots of dips as the market tries to keep climbing.

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