Market Direction today turned back to sideways as the market wandered and tried to close near its highs but at least it did close in positive territory even though only by a slim margin. Part of the lackluster day for market direction was caused by the lack of economic news today. Interestingly the US Dollar was higher today as was Gold which is not too often a common combination. The market continues showing signs of strength but the sideways action won’t last much longer. The roller coaster move of the past 3 days has set the market up for either a move higher or a retrenchment. Let’s check the market direction technical indicators to see which way the market direction appears poised to move on Feb 7.
Market Direction Closings
The S&P 500 closed at 1512.12, up 0.83 points and the Dow closed at 13,986.52, up 7.22 points. The NASDAQ closed at 3168.48 down 3.10.
Market Direction Technical Indicators At The Close of Feb 06 2013
Let’s take a moment now and review the market direction technical indicators at the close of today on the S&P 500 and view tomorrow’s outlook.
Market Direction technical indicators for Feb 6 2013
For Momentum I am using the 10 period. Momentum is still positive but it is sliding lower.
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 moving lower which confirmed the market direction down call from two days earlier.
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, a good sign for market direction to continue higher.
Rate Of Change is set for a 21 period. Rate Of Change is still positive and is moving higher.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is overbought but signaling that market direction will be higher in two or three days out.
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 overbought and it is indicating tomorrow will be higher.
Market Direction Outlook And Strategy for Feb 07 2013
The market direction outlook for the next trading day is for an attempt to push the market direction higher. The Fast Stochastic is the most visible sign of a push higher as it has a wide-spread between its K and D period readings. We could therefore see a sharply higher day. Meanwhile MACD is still indicating that a sell signal is still active which is part of the reason I prefer to remain with a cautious stance on the markets when it comes to my investing.
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