The outlook for Wednesday was for stocks to move higher. But with oil falling and the European community struggling over what to do about Greek debt, the markets were stuck sideways while they waited to see if a resolution was found.
Advance Decline for Feb 11 2015
Volume was almost unchanged from Tuesday with 3.6 billion shares trades. 56% of all trades were moving lower while 42% were higher. New highs came in at 100 and new lows at 28. None of this points to the markets moving much higher at this point.
Market Direction Closings For Feb 11 2015
The S&P closed at 2,068.53 down 0.06. The Dow closed at 17,862.14 down 6.62. The NASDAQ closed at 4,801.18 up 13.54
Market Direction Technical Indicators At The Close of Feb 11 2015
Let’s review the market direction technical indicators at the close of Feb 11 2015 on the S&P 500 and view the market direction outlook for Feb 12 2015.
SPX Market Direction Technical Analysis for Feb 12 2015
Stock Chart Comments:
Today was basically a sideways day. The NASDAQ moved higher thanks to Apple stock but in general investors were sitting on the sidelines waiting for a resolution out of Europe. Thursday we also get the Weekly Initial Unemployment Insurance Claims.
The most important event today was the doji-cross candlestick at the close of the day. This is almost always followed by down action either Thursday or Friday.
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 climbing and 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. MACD continued 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 moving sideways.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is turned up and moving sideways support the 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 issued a weak up signal at the close today. It 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 signaling up for stocks and is also overbought.
Market Direction Outlook for Feb 12 2015
Technically the outlook is still unchanged for Thursday. Stocks will remain weak in the morning but should rally in the afternoon. If though a resolution is found to the Greek debt problem, or Ukraine fighting, stocks could rally slightly higher. Meanwhile the doji-cross at the close usually signifies selling pressure within one or two days. Therefore we could see some selling pressure Thursday or Friday.
For Thursday I am expecting more sideways action with a bias slightly up.
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