The market direction outlook for Wednesday was for stocks to remain weak and move lower. In general investors are waiting for the unemployment numbers on Friday. That could be the game changer investors are waiting for. Meanwhile on Thursday we get the Weekly Initial Unemployment Insurance Claims. If they move higher than 348,000 the market will most likely move lower as discussed in the article on market timing using the Weekly Initial Unemployment Insurance Claims.
Investors can read that article through this link. Let’s take a look at Wednesday’s market direction action.
Market Direction S&P 500 Daily Chart for Feb 5 2014
The intraday one minute chart below shows the action for Wednesday. The morning saw a short rally after an initial sell-off. That rally ended quickly with the S&P putting in a morning low. This low as explained in my intraday market outlook today was below the lowest point in the decline so far, so basically a new lower low. From there investors seemed to feel that this was a retest of Monday’s low and they felt it was successful. They bought back into the market in the afternoon and by 1:00 PM the market has pushed beyond the morning high. From there the market moved sideways with a bias lower. The close saw a short spike and then a push back to close just above support at 1750, with a close at 1751.64. This was lower than yesterday’s close. The key at present to trading this market is staying on the downtrends for trades. I did a Spy Put Options this morning which was quite good but I did not trade the uptrend in the afternoon. With the market direction confirmed down, I cannot trade the uptrend with any degree of certainty whereas the downtrend is easy to trade as that’s the way the market is moving at present. In other words, I am stacking the odds of my trades being successful, in my favor by trading the market direction – which is down.
Advance Declines For Feb 5 2014
The advance decline ratio was close today with 40% of stocks advancing and 56% declining. But there were just 32 new highs (yesterday there were 30) but 137 new lows (yesterday 129). Momentum is obviously still to the downside for stocks.
Market Direction Closings For Feb 5 2014
The S&P closed at 1751.64 down 3.56. The Dow closed at 15,440.23 down 5.01. The NASDAQ closed at 4011.55 down 19.97.
The IWM ETF closed down to 108.65.
Market Direction Technical Indicators At The Close of Feb 5 2014
Unfortunately my discount broker was down this evening and I waited quite a few hours. They unfortunately were unable to restore their service.
Market Direction Outlook And Strategy for Feb 6 2014
Basically though, the market was unchanged on the day as far as the technical indicators were. The mood is still cautious for investors. The technical indicators are still negative pointing to lower prices. However much hinges on the unemployment report and that comes out on Friday. Many analysts expect it will be the catalyst for the next move in the markets. Tomorrow though we could see some selling based on the technical indicators I saw when the market initially closed before my broker lost their charting.
For tomorrow I am not expecting a big move lower or higher but if the Weekly Initial Unemployment Insurance Claims are above 350,000 I do expect the market will move lower.
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