Today the morning was all about Saudi Arabia’s “rant” about no ceiling cap on production ever having been agreed to which sent oil tumbling and the market followed. The sell-off though was on light volume and not all stocks were participating even at the worst of the sell-off in the early morning.
Oil prices then rose, recovered the day’s losses and pushed into positive territory and the markets all followed. The NASDAQ was ahead of the SPX and DOW in the rally back up.
Index Closing Prices
The indexes closed just below the day’s highs. The S&P closed at 1,929.80 up 8.53. The Dow Jones closed at 16,484.99 up 53.21. The NASDAQ closed at 4,542,61 up 39.02.
Advance Decline Numbers
Volume rose slightly to 4.3 billion. By the close of the day 56% of all stocks were rising. New lows outdistanced new highs with 73 new lows and 46 new highs.
The NASDAQ saw 1.9 billion shares traded with 65% of all volume being traded to the upside. There were 101 new lows and just 20 new highs.
Market Direction Technical Indicators At The Close
SPX Market Direction Technical Analysis for Feb 24 2016
Stock Chart Comments:
The S&P intraday fell through the 20 day simple moving average (SMA) and then recovered to close above it but still below the 50 day simple moving average (SMA). The 200 day and 100 day moving averages continue to lead the market.
The closing candlestick is bearish for the following day.
Support and Resistance Levels:
These are the present support and resistance levels. These levels have not changed since January 2015.
2100 is resistance.
2075 was light support and is also resistance. Below that is 2050 which is also resistance.
Stronger support was at 2000 which is now resistance.
Weak resistance is at 1970 while stronger resistance is at 1956 and technically it is more important than 1970 for the market. 1940 is light resistance as was 1920 which is now support. 1900 is more symbolic than anything else.
1870 is support. 1840 continues to be support. The 1820 level is light support. The strongest support level is at 1800.
1775 and 1750 are both 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 all-time high of 2134.72. This would be the biggest correction since the plunge in 2011 of a 20% pullback. A pullback to 1750 from the all-time high would be a drop of 384 points for a decline of 18%. A pull-back of that size would definitely stun investors and bring to question whether the bull market which started in 2009 is finished. From 1750 it is an easy slide to 1600 which was near the market top in 2007.
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and did not take much of a hit today at all despite the selling. It moved up slightly.
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 buy signal Feb 16 which is starting to weaken.
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 rising back to an overbought signal.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive and back climbing signaling a resumption of the uptrend.
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 up for stocks. It is overbought and could change to a down signal with any selling on Thursday.
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 pointing up for stocks. It is overbought.
Market Direction Outlook for Feb 25 2016
For Thursday, there are no technical indicators that are bearish. All the indicators have turned back up and three are back signaling overbought following today’s dramatic turn-around.
The closing candlestick is probably the biggest concern as it has a fairly high degree of accuracy and it is pointing lower for Thursday.
It looks like Thursday will start with a bit of a jump and then some weakness which will be bought into and the index moved higher. So we have weakness with a bias up for Thursday.
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