The outlook for Thursday was for stocks to drift sideways and keep the bias to the downside. Both the S&P and the Dow drifted lower with slight losses while ther NASDAQ managed a small gain.
Advance Decline for Feb 19 2015
Volume was still reasonably good with 3.2 billion shares traded. 59% of all volume though was trading to the downside with only 39% to the upside. There were though only 14 new lows and 146 new highs. This continues to confirm the outlook for stocks to recover shortly and move higher as these kinds of numbers point to consolidation.
Market Direction Closings For Feb 19 2015
The S&P closed at 2,097.45 down 2.23. The Dow closed at 17,985.77 down 44.08. The NASDAQ closed at 4,924.70 up 18.34.
Market Direction Technical Indicators At The Close of Feb 19 2015
Let’s review the market direction technical indicators at the close of Feb 19 2015 on the S&P 500 and view the market direction outlook for Feb 20 2015.
SPX Market Direction Technical Analysis for Feb 19 2015
Stock Chart Comments:
The S&P continued to drift sideways and keep a bias lower on Thursday. All the major moving averages though continue to point to this latest weakness as being an overbought condition.
Support and Resistance Levels:
These are the present support levels.
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 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 positive but has stalled.
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 is positive but down slightly.
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 overbought.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is turned back down indicating the uptrend has weakened.
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 still overbought and is neutral on its direction for stocks.
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 has turned down for stocks and may issue a sell signal on Friday.
Market Direction Outlook for Feb 20 2015
Technically there is not a lot of change yet. Stocks closed well off their lows for today which is another indicating that they may move higher on Friday. Overall the weakness is to be expected at the present time. I am not anticipating a larger move lower. Instead stocks look fairly steady here and while they look set to stay weak for perhaps one more day, they may try to close positive on Friday. The chance of that happening is probably 50%. If the weakness does not end on Friday it probably will on Monday, after the weekend.
Stay FullyInformed With Email Updates
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)