Market Direction Outlook For April 24 2015 – Modestly Higher

The market direction outlook for the S&P for Thursday April 23 was for stocks to move higher. The anticipation is for stocks to take out their all-time highs but just how much further they could move is difficult to pinpoint present. As explained in last night’s Market Direction Outlook, stocks had enough momentum to move higher on Thursday.

It was an excellent day with the NASDAQ hitting an all-time high for the first time in 15 years. The S&P made a new all-time high of 2120.49 and the DOW advanced to 18,133.03 before pulling back to close up just 20.42 points. All-in-all though, it was a great day for stocks.

Advance Decline for Apr 23 2015

With all three indexes moving higher and two indexes setting new all-time highs, investors who have been on the sidelines finally decided to get back into stocks. Volume jumped to 3.65 billion shares up from 3.35 billion on Wednesday. 62% of all volume was advancing and 65% of all stocks were moving higher. New 52 week highs moved to 113 while new lows fell back to 11.

Many investors have been sitting on the sidelines, worried about an impending crash or collapse. They have been “itching” to get back in but remained nervous. Today’s move higher finally drew in some of those investors. This will help stocks to move up.

Market Direction Closings For Apr 23 2015

The S&P closed at 2,112.93 up 4.97 pulling back after making all-time highs intraday. The Dow closed at 18,058.69 up 20.42 and well off the intraday highs.  The NASDAQ closed at 5056.06 up 20.89 to a new all-time high closing, wiping out the March 2000 record high.

Market Direction Technical Indicators At The Close of Apr 23 2015

Let’s review the market direction technical indicators at the close of Apr 23 2015 on the S&P 500 and view the market direction outlook for Apr 24 2015.

Market Direction Technical Analysis for Apr 23 2015

Market Direction Technical Analysis for Apr 23 2015

Stock Chart Comments:

The market rose intraday to set a new all-time high but then moved lower into the close to end with a gain of just 4.97 points. The 20 day simple moving average (SMA) has been trending below the 50 day simple moving average (SMA) and today it started to turn back up. If the 20 day crossed up and over the 50 day it will end the recent sell signal generated when the 20 day crossed down and over the 50 day. It will also mean a signal up.

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 and convince investors that the market has staying power and will push well beyond 2100. That still does not appear to be the case.

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 pullback in January and February.

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 and bring to question whether the bull market is finished.

Momentum: For Momentum I am using the 10 period. Momentum is positive but moving more sideways than up or down.

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 that signal moved higher today.

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 is also trending more sideways than up or down.

Rate of Change: Rate Of Change is set for a 21 period. The rate of change may be getting ready to issue an up signal 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 pointing up for stocks and is overbought.

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 up for stocks and it too is overbought.

Market Direction Outlook for Apr 24 2015

The bias for Friday is for stocks to continue to advance, but only moderately so. Earnings keep coming in mixed, including today and that will help keep a lid on any runaway moves higher.

Technical indicators are more supportive of stocks moving higher than they are of stocks selling off lower.

Despite the break-outs in the NASDAQ and the S&P, caution remains warranted as many stocks are overvalued.

For Friday stocks should end still higher on the day.

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