Today’s tug of war in market direction was interesting to watch.Various news events affected the market direction at different times. The National Association of Realtors reported that existing home sales fell 0.4 percent in March which missed expectations and was down from 0.6 percent last month. The market direction fell on this news. Gold moved higher for the 5 straight trading session although it remains at bear trading levels. At first gold miners moved higher on the news and then some fell and others hung on. Goldcorp stock was up 2.6 percent but Barrick Gold Stock was down 1.1 percent.
Apple Stock moved lower and then pushed higher moving over $400 before closing at $398.67 ahead of tomorrow’s earnings. Caterpillar fell in the morning on its dismal revenue but then surged in the afternoon. Netflix meanwhile climbed 6.7 percent and then after hours it rose 19 percent as they reported earnings of 31 cents versus the expected 21 cents.
Market Direction Tug Of War
You can see the tug of war today. The morning saw selling during which I sold my puts in a variety of stocks and then by 1 pm the market direction had reversed back up but only to where the market had started the day. By 2:00 PM the market was still stuck and then moved somewhat higher into the late afternoon but pulled back again into the close.
Market Direction 5 minute chart for April 22 2013
Market Direction and IWM ETF Russell 2000
The Russell 2000 pushed back to the 100 day exponential moving average (EMA) in the morning and then managed to climb back and close up .26 cents but still below the 50 day simple moving average (SMA).
Market Direction Closing For Apr 22 2013
The S&P 500 closed at 1,562.50 up 7.25 points. The Dow closed at 14,567.17 up 19.66 points. The NASDAQ closed at 3,233.55 up 27.50 points thanks in large part to Intel, Microsoft and Apple Stock all three of which were higher.
Market Direction Technical Indicators At The Close of Apr 22 2013
Let’s take a moment now and review the market direction technical indicators at the close of Apr 22 2013 on the S&P 500 and view the outlook for April 23 2013
For Momentum I am using the 10 period. Momentum is neutral.
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 sell signal on Monday April 15 and that signal continues.
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 on Monday continued the move up and is now positive.
Rate Of Change is set for a 21 period. Rate Of Change also turned up and is slightly positive but more neutral than anything else.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic issued a sell signal on the market on Monday April 15 but it is now signaling the market direction may move higher.
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 signaling that the market direction will move higher tomorrow.
Market Direction Outlook And Strategy for Apr 23 2013
The Market Direction for Tuesday looks stronger than it did last week but overall the movement today was not encouraging. If Apple earnings are worse than expected we could see the market direction pull back again. Overall many stocks are far from “cheap” and the correction, despite all the media attention including an interview over the weekend with Nouriel Roubini who remains pessimistic, has only been shallow so far. There could be an attempt at a bounce in the morning but a lot will depend on Apple Stock. Meanwhile the consensus among the indicators is that nothing much has changed. Selling has slowed somewhat but overall the mood remains poor.
Until the market direction can push back to new highs and confirm those highs, the strategy I will remain with is small positions and out of the money Put Selling on strong stocks. The market direction for tomorrow then is dependent on Apple Stock, but the direction still looks very undecided.
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