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Market Direction today started off as expected but then with a slight pullback to below 1500 in the S&P 500, investors seemed to feel that this was the test they were looking for and they were back buying. Not all stocks joined in the market direction push to new 5 years highs, but the advance / decline line still is bullish. More on this later in the market direction outlook below.

The DOW market direction added another 72 points and is within reach of 14,000. From there it is only a matter of 200 points more to break the October 2007 all-time high of 14198.10.

Both the S&P 500 and the DOW failed to close at their market direction highs for the day but instead as expected closed down slightly from their highs. This continues to reflect the extreme overbought conditions which still are putting stress on the upward momentum of the market direction.

Market Direction Action Jan 29 2013

The number of analysts who are surprised at the market direction climb ever higher is growing. This might be the contrarian indicator the bull market needs to keep pushing. However February tends to be a poor month for market direction uptrends when compared to the best 6 months of the trading year so perhaps this week will mark a high of some significance before the market direction pulls back to consolidate. Analysts remain doubtful this rally will hold the present market direction highs although they admit that earnings are better than expected.

Meanwhile Amazon stock collapsed 5.68% on excellent gross profits but weaker than expected revenue. Razor thin margins are hurting Amazon and it is just not a stock I like. Eventually they may have to raise prices and consumers are a fickle bunch. I know I shop Amazon.com but if they raise prices I will definitely move to other retailers.

I was just reading about Elliot Wave giving a long-term sell signal on gold when gold bullion rose $8.60 U.S. to $1,663 a troy ounce. Oil also rose, gaining $1.00 a barrel to $97.44 . Chevron stock is a great stock but I still prefer XOM Stock for my Put Selling and trading.

Pfiezr Stock rose 3.1 percent after they released their fourth-quarter profits that were well beyond analysts estimates.

One last note was the collapse of 4.6% in Ford stock as analysts fretted about the automaker selling too many low-margin cars and not enough high-margin trucks.

Market Direction Closings

The S&P 500 market direction closed higher at 1507.84 up 7.66 points and the Dow market direction also closed higher at 13,954.42, up 72.49 points. The NASDAQ market direction was dragged lower by Apple Stock to close at 3153.66 down 0.64 as technology stocks continue to have trouble and Amazon stock in particular hurt the NASDAQ.

Market Direction Technical Indicators At The Close of Jan 29 2013

Let’s take a moment now and review the market direction technical indicators at the close of Jan 29 2013 on the S&P 500 and see what they predict for tomorrow.

Market Direction Technical Indicators Jan 29 2013

Market Direction Technical Indicators Jan 29 2013

For Momentum I am using the 10 period. Momentum is still solidly positive and momentum is back climbing higher today after declining yesterday. For market direction momentum has been almost exact since the start of this rally making in invaluable.

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 but despite today’s move higher MACD is flat from yesterday. MACD is showing that the market direction while still up is under increasing strain or pressure.

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 continues to pull back from overbought. Today’s reading of 73.68 is still overbought but certainly not to the extreme and indicates there is still room for markets to climb higher. As the rally has progressed over the past 4 trading sessions, the Ultimate Oscillator has continued to decline. While not a major concern it does show that the market direction move higher may be losing some steam as buying pressure is not as great as it was on Jan 22 and Jan 23.

Rate Of Change is set for a 21 period. Rate Of Change is still positive and today the Rate Of Change indicator had a big jump higher from yesterday’s close. This remains one of the strongest bullish indicators for a continuation of the market direction higher.

For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is overbought to the extreme but it is now back signaling that the market direction may shift to sideways with a bias to higher. What is important is that there is no signal is for any significant decline.

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 too is indicating that while the market direction is more sideways than up, the bias remains up rather than down.

Market Direction Outlook And Strategy for January 30

The market direction outlook for Wed January 30 2013 is to see the market direction continue to climb. The consensus among the market direction technical indicators is for the uptrend to continue. The Slow Stochastic which tries to predict more than one day away is giving a signal that prices should be higher by week’s end even if only marginally. Again what is significant is there is not indication of any severe market direction pull back.

The extremely overbought condition of the overall market cannot be ignored however and the ongoing rally is definitely slowing as the advance / decline line while still bullish, is showing more stocks not participating in new highs or even moving higher daily. As the rally continues ahead the buying pressure looks impressive but the Ultimate Oscillator is showing that signs of weariness are growing and there is increasing pressure for the market direction up to stall. It is this pressure that could bring an end to the rally for more than a couple of days. This does not mean a correction of any size can be expected but it does mean that market direction gains from here may be more difficult to achieve until there has been a pullback of some degree. Meanwhile the market direction technicals look good and no significant correction can be seen on the short-term horizon.

Internal Market Direction Links

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)

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  • Denis

    Hi Teddi,

    You state that Apple is the cause of Nasdaq lagging but Apple has been up 2% for 2 days.   Am I missing something?    IWM not following S&P is unusual which means small caps are out of favor today anyways.


  • Hi Denis
    The NASDAQ lagging is because of the selling pressure among the technology stocks. Apple Stock is not doing much of anything and continues to pressure the NASDAQ. It needs to bottom and move higher to assist the NASDAQ. Meanwhile Amazon Stock today collapsed over 5% also holding the NASDAQ back. Until technology bottoms, the NASDAQ will have trouble. It should only be a couple of days and we should see the NASDAQ back.

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