The outlook for Tuesday was a repeat of Monday with stocks continuing to stay sideways with a bias lower. While stocks did move lower in the morning, they pushed higher into the lunch hour and then broke to a new all-time high for 2015 by the close.
Advance Decline for Feb 10 2015
Volume was higher by 200 million shares on Tuesday at 3.7 billion shares. 60% were to the upside and 39% to the downside. New highs came in at 78 and new lows at 33. New highs were not what an investor would expect considering the move higher today. Tomorrow the number of new highs needs to be better.
Market Direction Closings For Feb 10 2015
The S&P closed at 2,068.59 up 21.85. The Dow closed at 17,868.76 up 139.55. The NASDAQ closed at 4,787.64 up 61.63.
Market Direction Technical Indicators At The Close of Feb 10 2015
Let’s review the market direction technical indicators at the close of Feb 10 2015 on the S&P 500 and view the market direction outlook for Feb 11 2015.
Market Direction Technical Analysis for Feb 10 2015
Stock Chart Comments:
Yesterday (Monday Feb 9) I indicated that the SPX must recover the 2050 level and push higher, either it risk falling lower. Today investors bought right at the open and when the market drifted by to 2050 later in the morning, investors bought again. The S&P closed above the 50 day simple moving average (SMA) and near the Upper Bollinger Band. It also closed at the highest level this year. The next step is to retake 2075.
Support and Resistance Levels:
These are the present support levels.
2075 was light support and is now resistance. Below that is 2050 which is 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 then 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 at this point and it is not something I am anticipating at present.
Momentum: For Momentum I am using the 10 period. Momentum is back positive.
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 weak buy signal Feb 4. Today it regained its footing and moved higher.
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 moving sideways.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is turned up and ready to support a trend change to up.
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 neutral and overbought for a second day unimpressed with the day’s activity and close higher.
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 signaling up for stocks and is also overbought.
Market Direction Outlook for Feb 11 2015
Technically today’s action has left one indicator neutral, 3 rising and two positive and on the verge of moving back higher. The outlook then is for stocks to jump at the open, move lower and then push higher into the close on Wednesday.
Market Direction Strategy For Feb 11 2015
The rest of this article is for USA Members as I discuss my investing strategy notes as well as trade ideas for Wednesday Feb 11 2015. FullyInformed USA Members can login directly through this link for tonight’s investing strategy notes or they can sign in to the full site here. Non-members can join here or read about the benefits of a membership.
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