The Market Direction Outlook for Thursday Apr 2 was for stocks to retain a bias lower momentum. Instead by 9:40 the bias lower was over and investors bought stocks sending the S&P to 2072 by 10:00 AM. From there the usual day commenced with the market drifting sideways around the 2065 level until the close when the SPX closed at 2066.96.
Advance Decline for Apr 2 2015
Volume on Thursday fell back to just 3.1 billion shares on what was once again a mediocre volume day. Up volume comprised 76% of all trades yet the number of new highs was just 105, again reflecting caution on the part of investors and a lack of buying interest heading into the long weekend. Volume for the shortened week was poor.
Market Direction Closings For Apr 2 2015
The S&P closed at 2,066.96 up 7.27. The Dow closed at 17,763.24 up 65.06. The NASDAQ closed at 4,886.94 up 6.71.
Market Direction Technical Indicators At The Close of Apr 2 2015
Let’s review the market direction technical indicators at the close of Apr 2 2015 on the S&P 500 and view the market direction outlook for Apr 6 2015.
Market Direction Technical Analysis for Apr 2 2015
Stock Chart Comments:
Investors bought back into stocks on Thursday when the early morning pullback failed to result in any kind of strength to the downside. However all the action was over by 10:00 AM. From there stocks drifted sideways trending around the 2065 valuation. Stocks closed below the 50 day simple moving average (SMA) but above the 100 day. The 100 day moving average though is starting to turn lower. The 20 day simple moving average (SMA) crossed over and down the 50 day. If the 20 day continues its move lower it will signal a sell on the market.
The Upper Bollinger Band has turned down and is moving lower while the Lower Bollinger Band is trending sideways. This could set the market up for a Bollinger Bands Squeeze later this week or into next unless the Upper Bollinger Band starts to turn back up. Both of these are negative signals for the market.
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 is negative but climbing higher.
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 was still weak on Thursday.
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 but turning sideways indicating not much upside ahead.
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 pointing down to start the week.
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 a very weak up signal at the close on Friday.
Market Direction Outlook for Apr 6 2015
The technical indicators are continuing to stay mixed. There are growing neutral signs and only two positive signals. There are three negative signals. Once more a very mixed market. The outlook then for Monday is mixed but the bias remains lower heading into earnings announcements, despite the move up on Friday.
A lot depends on the quarterly earnings which unofficially start mid-week. Investors in general are of the opinion earnings will disappoint and are therefore taking a cautious stance heading into earnings..
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