For Tuesday it was all about Greece and Fed Chair Janet Yellen. Greece looks like it has yet another life one more time as they grapple with their debt load. Meanwhile their stock market is back at 2007 highs. Go figure! Yellen on the other hand remained dovish in her testimony today and investors liked what they heard. The chance of a rate hike this spring now seems remote. If that is the case the “dance” continues and investors pushed the NASDAQ to its third highest reading in history and the S&P closed at another new record high. The Dow also set a new high intraday of 18,231.09 closing just below it. Yet another Fed rally was the story of Tuesday.
Advance Decline for Feb 24 2015
Volume was up slightly on Tuesday at 3.2 billion shares. 61% of all volume was to the upside with 38% to the downside. Only 1% remained unchanged. New highs came in at 173 as they are now starting to reach for that magic 200 number I have been discussing. Once they hit that number stocks should continue the advance for a while longer.
Market Direction Closings For Feb 24 2015
The S&P closed at 2,115.48 up 5.82. The Dow closed at 18,209.19 up 92.35. The NASDAQ closed at 4,968.12 up 7.15.
Market Direction Technical Indicators At The Close of Feb 24 2015
Let’s review the market direction technical indicators at the close of Feb 24 2015 on the S&P 500 and view the market direction outlook for Feb 25 2015.
Market Direction Technical Analysis for Feb 24 2015
Stock Chart Comments:
The S&P pushed higher into new territory again on Tuesday. It continues to stay below the Upper Bollinger Band which indicates some weakness, but in general the direction remains solidly higher. Much of the rally today was caused by Fed Chair Yellen’s comments and we have seen this before. Often within a day or two investors sell positions following the Fed induced rally, so that’s something we may have to look forward to.
All the major indexes continuing to move higher. There is no sign of an imminent pullback at this point. However the S&P is just 15 points above very light support at 2100. I won’t be surprised to see the S&P move to test for support later this week or early next.
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 and started to turn back up today.
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 is gradually issuing weaker divergences.
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 very overbought.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is turned sideways and is now steady indicating there is probably more room to the upside yet 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 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 is also neutral on the direction of stocks and very overbought.
Market Direction Outlook for Feb 25 2015
Fed Chair Janet Yellen testifies again on Wednesday. As long as there are no surprises I would not expect much change in the market direction. There are technical signals that continue to point to a bit of weakness and that might keep stocks from advancing too quickly on Wednesday.
However I am expecting a positive close again on Wednesday even if it ends up being just a slight one.
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