With a new week approaching and the markets all higher on Friday, stocks are faced with the prospects of many revenue numbers all week long. While many analysts believe that poorer quarterly earnings are discounted by the market, a slew of poor numbers may not be fully discounted. We could see additional volatility as the week progresses. Let’s look at Friday’s numbers and see where Monday may be heading.
Advance Decline for Apr 10 2015
Volume on Friday was a bit lower at 3.1 billion shares. Up volume was 65% of al trades which was up from Thursday’s 57%, but new highs were still poor at 109.
New lows though came in at just 2 so obviously the bulls won Friday handily. New highs though need to move up to reflect a rising market and we are still not seeing that happen.
Market Direction Closings For Apr 10 2015
The S&P closed at 2,102.06 up 10.88. The Dow closed at 18,057.65 up 98.92. The NASDAQ closed at 4,995.98 up 21.41.
Market Direction Technical Indicators At The Close of Apr 10 2015
Let’s review the market direction technical indicators at the close of Apr 10 2015 on the S&P 500 and view the market direction outlook for Apr 13 2015.
Market Direction Technical Analysis for Apr 10 2015
Stock Chart Comments:
Stocks ended with the S&P back to the 2100 level. Three days of solid gains have placed the S&P within striking distance of the mid-March high of $2114 which could set it up to challenge the all-time high. The 20 day SMA is now moving higher and away from the 50 day signaling that the market direction up should continue.
Support and Resistance Levels:
These are the present support and resistance levels.
2100 was very light support and is now resistance. Stocks will have to stay above it to change it back to support.
2075 is light support. Below that is 2050 which is also light support. Stronger support is at 2000 which has repeatedly held the market up throughout each recent pullback.
Weak support is at 1970. Stronger support is at 1956.
1870 and 1840 are both levels with strong enough support to delay the market falling and should see a sideways action attempt while investors decide whether to sell or buy.
The other two support levels are 1775 and 1750. I have explained that these two are critical support for the present bull market. While 1775 is important it is 1750 that is the bottom line.
A break of 1750 would mark a severe correction from the most recent high. This would be the biggest correction since April 2012. A pull-back of that size would definitely stun investors.
Momentum: For Momentum I am using the 10 period. Momentum is positive and rising.
MACD Histogram: 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 buy signal on Apr 9 and confirmed it on Apr 10.
Ultimate Oscillator: 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 positive and rising into overbought.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is signaling up although it dipped on Friday which could signal a test of the 2100 level is coming.
Slow Stochastic: For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic tries to predict the market direction further out than just one day. The slow stochastic is still pointing up for stocks.
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 issued yet another up signal for stocks.
Market Direction Outlook for Apr 13 2015
The technical indicators are still all pointing to higher prices for the S&P and MACD confirmed its buy signal. Three solid days of gains have placed the S&P back to the 2100 level. The rate of change indicator dipped on Friday which could indicate a test of the 2100 level will happen either Monday or Tuesday.
With the markets up at 2100, look for the S&P to advance at the open on Monday and then dip to retest for support. A couple of days of testing the 2100 level would not be unusual, but for now the direction remains up whether there is testing or not of 2100.
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