Today was a day for the Market Direction to consolidate and investors to take profits and adjust positions. Today allowed investors to prepare for the S&P 500 to try to push the market direction above the all time S&P high from 2007.
The Dow meanwhile manage to squeeze in another gain for the day, making this the eighth session for new highs in the Dow Index. There was no economic news of any importance today although the Republicans presented their plan for a 4.6 trillion dollar slashing of spending over the next 10 years to balance the budget. I have no idea how this will proceed.
Market Direction Closings
The S&P 500 closed at 1552.48, down 3.74 points and the Dow closed at 14,450.06 up 2.77 points. The NASDAQ closed at 3242.32 down 10.55 dragged lower by Apple Stock which was down 2.2 percent and BlackBerry Stock down almost 3%.
Market Direction Technical Indicators At The Close of Mar 12 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.
For Momentum I am using the 10 period. Momentum is still solidly positive. Today momentum moved sideways reflecting the flat nature of the market, but it remains decidedly bullish.
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 continues to confirm the buy signal from March 6.
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 overbought but the strong overbought signal from yesterday unfortunately was not built on. This continues to support the sideways motion in the market direction.
Rate Of Change is set for a 21 period. Rate Of Change is still positive but it too reflects the flat movement of the market as this is the third day it has been flat, not climbing or falling. Another sideways predictor.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is overbought to the extreme. I recently mentioned how I was expecting to see the Slow Stochastic periods reach the point of matched readings. They are exactly that today at the close signaling a neutral stance. This means the markets could continue sideways or up or down. The Slow Stochastic is now unsure which way the next direction will take the markets. Normally when the signal is neutral to this extent with both readings in the extreme overbought area we should expect the market direction to shift to lower. For more we need to look at the 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 extremely overbought and while the K period and D period are very close,, the D period has moved over the K period signaling that the market direction will be lower tomorrow.
Market Direction Outlook And Strategy for Mar 13 2013
The market direction outlook for the next trading day is to possibly see more selling in the markets although the outlook is mixed again from the market direction indicators. MACD is signaling that the market direction is still up, while Rate Of Change is flat to neutral as is the Slow Stochastic. Momentum is still quite bullish while the Fast Stochastic indicates a change to down is ready to occur. Meanwhile the Ultimate Oscillator is overbought but once more turning flat. So the consensus is more a neutral market direction for tomorrow with a bias to the downside.
I cannot help though but look at momentum and MACD and wonder if today was just a one day rest before investors try to push the market direction higher again tomorrow and try to take out the 2007 highs for the S&P 500 sometime this week.
I am still looking at dips as opportunities and picking through my favorite stocks for more Put Selling opportunities. I remain cautious but still invested as I wait for the market direction to turn one way or the other. Right now the market direction technicals reflect that the market will be weak again tomorrow.
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