The outlook for Tuesday Feb 3 2015 was for stocks to move up. They did so in a very big way, especially in the afternoon. Much of the rally over the past couple of days has been the increase in the price of oil. Now trading above $50 a barrel, this evening the news on oil was that inventory continues to show huge gluts. Oil pulled back in the futures so we will have to see what Wednesday brings.
Advance Decline for Feb 3 2015
Volume was overwhelmingly positive with 4 billion shares traded to the upside and 549 million to the downside. It was a very one-sided day. New highs though came in at 147 and still need to move back above 200 to keep momentum to the upside staying strong. New lows though were just 17.
Market Direction Closings For Feb 3 2015
The S&P closed at 2050.03 up 29.18. The Dow closed at 17,666.40 up 305.36. The NASDAQ closed at 4,727.74 up 51.05.
Market Direction Technical Indicators At The Close of Feb 3 2015
Let’s review the market direction technical indicators at the close of Feb 3 2015 on the S&P 500 and view the market direction outlook for Feb 4 2015.
SPX Market Direction Technical Analysis for Feb 3 2015
Stock Chart Comments:
The S&P rally today has placed the index back at the important 2050 level. It also closed at the 50 day moving average. We have see there is a Bollinger Bands Squeeze beginning to form.
Support and Resistance Levels:
These are the present support levels.
2075 was light support and is now resistance. Below that is 2050 which was light support and is now neutral as of today. 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 amd climbing.
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 sell signal on Jan 28 and today it is neutral with a very weak possible buy signal at the close. Tomorrow will be the better day to decide..
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 climbing
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is back positive and turned up dramatically today supporting the rally.
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 an up signal 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 signaling up for stocks and has a strong buy signal still in place at the close.
Market Direction Outlook and Strategy for Feb 4 2015
The bias for stocks is back to up but after two big rallies the market may rest or try to consolidate gains. As well the drop in the price of oil overnight may weigh on the markets in the morning. This is a highly volatile market so almost anything is possible but at present the bias is still up. I am expecting some weakness on Wednesday but still a positive close.
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)