The market direction outlook for Tuesday was for stocks to stage a rally at the open and then move back around 11:00 AM but then move higher into the afternoon and close positive. Overall the move on Tuesday was almost exactly that. Part of the market direction climb higher is being caused by the growing numbers of M&A activities. This has got the attention of investors who are busy chasing what they think will be the next merger and acquisition target. Meanwhile it is now estimated that corporate earnings are expected to grow 1.4 percent in the quarter which compares poorly with the growth of 5.2 percent from the same period a year earlier. This is why I remain cautious and selective in my Put Selling at this time. The market direction can push to new highs, but the question is whether it can stay higher which is what I doubt.
Market Direction S&P Intraday Chart April 29 2014
Below is the one minute chart for the S&P intraday. The market opened with a strong short rally which made an early morning high almost at 1880. From there the market direction declined almost back to the open. A rally then commenced which continued throughout the lunch hour and broke through the morning high and the 1880 level. The rest of the afternoon the market did not fall but couldn’t climb either. The sideways action ended with stocks moving lower and closing just below the morning high. This is becoming typical for the market direction, a big opening rally, and the market making the day’s high early in the morning. Then a move lower, often at 11:00 am and then a push higher in the afternoon. This is making it easy to trade the Trading For Pennies Strategy and the Spy Put Options almost daily now. I will put up more articles to review these strategies shortly.
Advance Declines For April 29 2014
Advancing issues made up 58% of the volume today and declining issues made up 39%. Meanwhile new highs reached 135 and new lows were half that at 77. The number of new lows is rarely changing but new highs today are up again. Still though strong rallies are double this number of new highs.
Market Direction Closings For April 29 2014
The S&P closed at 1878.33 up 8.90. The Dow closed at 16,535.37 up 86.63. The NASDAQ closed at 103.54 up 29.14 but still below the 100 day EMA.
The Russell 2000 ETF IWM rose just 28 cents to 111.24 as the small caps remain under pressure.
Market Direction Technical Indicators At The Close of April 29 2014
Let’s review the market direction technical indicators at the close of April 29 2014 on the S&P 500 and view the market direction outlook for April 30 2014.
The 1750 level continues to hold the S&P up since the correction ended in early February. All the levels of any support above 1800 have been broken and will need time to heal and create support again. Any downturn in stocks will quickly see these levels above 1800 break. The only level above 1800 that has any support worth mentioning is the 1840 level. There is still no change to this. I am still expecting that at some point in the spring to summer period stocks will correct down to the 1750 level.
For Momentum I am using the 10 period. Momentum has been the best indicator over the past four months, replacing MACD as the most accurate indicator. Momentum is still positive and is turning sideways on Tuesday.
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 April 22 and on Tuesday MACD is still positive.
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 continuing to provide positive readings.
Rate Of Change is set for a 21 period. The rate of change is still providing a positive reading but is nearing neutral readings
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is signaling market direction is up for Wednesday.
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 continues to signal that Wednesday will see stocks move higher.
Market Direction Outlook And Strategy for April 30 2014
Here we are at the final day of April. Since the close on Jan 2 2014 stocks have experienced two corrections, one deeper than the other but neither were severe. Yet stocks are still up just 2.5%. The market direction has a general sideways trend with neither a bias higher or lower, but primarily sideways.
For the final day of April the market direction technical indicators are primarily positive and pointing to higher prices for the last day. Since this is the final day of the best six months for stocks, they should have a bias to move up for the final day of April.
Twitter Stock
On the downside however is Twitter. After hours Twitter Stock collapsed more than 11%. This will impact the NASDAQ tomorrow and could be the spoiler for the markets ending higher on Wednesday.
So we are back to a mixed market for Wednesday. What should be a higher day may be hurt by Twitter. But investors are still pushing for stocks to move higher. My guess is that while the market direction remains weak there should be enough momentum to push stocks to be higher on Wednesday, even slightly.
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links
Market Direction IWM ETF Russell 2000 Fund Info
Market Direction SPY ETF 500 Fund Info