The Market Direction Outlook for the start of April was for stocks to enter another see-saw type day. In general the direction was see-saw, but all to the negative side. Investors were still try to understand the drop of the markets on Tuesday when Wednesday opened. The futures were strongly to the downside most of the morning leading up to the market opening. This is a sign of investor nervousness. With earnings from Alcoa on April 8 which will unofficially start the next quarterly earnings, we might get a better idea as to what to expect for the upcoming quarter. Right now, investors and analysts are of the opinion that revenue and earnings from most companies will disappoint.
Advance Decline for Apr 1 2015
Volume on Wednesday rose slight to 3.6 billion shares. Volume was split with 52% of all trades moving higher and 45% moving lower. There were 66 new highs and 30 new lows. Neither the bulls or bears won out on Wednesday despite the decline in the markets.
Market Direction Closings For Apr 1 2015
The S&P closed at 2,059.69 down 8.20. The Dow closed at 17,698.18 down 77.94. The NASDAQ closed at 4,880.23 down 20.66. All indexes closed well off their lows of the day.
Market Direction Technical Indicators At The Close of Apr 1 2015
Let’s review the market direction technical indicators at the close of Apr 1 2015 on the S&P 500 and view the market direction outlook for Apr 2 2015.
Market Direction Technical Analysis for Apr 1 2015
Stock Chart Comments:
Investors were still trying to grasp what happened on Tuesday, today. Stocks moved lower and at one point in the morning the S&P broke through the 100 day exponential moving average (EMA). Stocks closed well off the lows but the drop was dramatic and could be setting the market up to fall below the 2050 level.
The 20 day simple moving average (SMA) is almost ready to cross below the 50 day SMA which would signal a market down signal.
Support and Resistance Levels:
These are the present support and resistance levels.
2100 was very light support and is now resistance. 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 was is moving lower and is negative.
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 sell signal on March 25. The sell signal is still active but remains weak.
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 back positive and rising.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is still undecided on the direction and is pointing more sideways than up or down for stocks.
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 now more neutral than up.
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 pointing down for stocks.
Market Direction Outlook for Apr 2 2015
The technical indicators are still mixed for another day. In general though we could see an up move attempt on Thursday as stocks head into the long weekend. However technically the indicators are pointing to a lower day on Thursday.
I am on the side of the technical indicators. With momentum declining lower and the fast stochastic signaling down for stocks, the technical outlook remains to the downside. For Thursday then the bias is lower for stocks.
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