The Market Direction Outlook for Friday was for stocks to attempt a better bounce than was seen on Thursday. There wasn’t much of a bounce on Friday and volume was poor. Fed Chair Janet Yellen was speaking during the last 15 minutes of the day and her comments were basically unchanged from the prior week but they seemed to calm a few investors as some buying into the close helped keep the indexes afloat.
Advance Decline for Mar 27 2015
Volume on Friday dropped to the lowest for the week falling to just under 3 billion shares. 52% of that volume was to the downside while 46% was to the upside. There were 45 new highs and 30 new lows. All in all, it was a mixed day with no clear winner for the second time during the week.
Market Direction Closings For Mar 27 2015
The S&P closed at 2,061.02 up 4.87. The Dow closed at 17,712.66 up 34.43. The NASDAQ closed at 4,891.22 up 27.86.
Market Direction Technical Indicators At The Close of Mar 27 2015
Let’s review the market direction technical indicators at the close of Mar 27 2015 on the S&P 500 and view the market direction outlook for Mar 30 2015.
Stock Chart Comments:
On Friday the S&P pretty well stayed unchanged although some of the technical indicators did change slightly. The index is still holding just above the 100 day exponential moving average (EMA). The 20 day simple moving average (SMA) is continuing to fall toward to 50 day. The decline for the week is still not much below the highs and is not making a new lower low or lower high at this point. Investors seem content to wait out the next quarterly earnings season which unofficially starts April 8.
On Friday the S&P still stayed above 2050.
Support and Resistance Levels:
These are the present support and resistance levels.
2100 was very light support and is now resistance. 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 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.
Momentum: For Momentum I am using the 10 period. Momentum turned back up on Friday and is now positive to neutral.
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 March 25 just two days after a buy signal. The sell signal though remains weak.
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 still negative and oversold.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change continues to point to a move back to the downside 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 signaling down for stocks to start the week.
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 pointing lower for stocks but you can see in the chart above that it is turning back up.
Market Direction Outlook for Mar 30 2015
The technical indicators are still pointing lower for stocks although a couple of the indicators are starting to signaling that we may get a bigger bounce to start the week. After the big sell-off on Wednesday last week, there was no further follow through to the downside. Stocks basically have trended sideways and in general while the technical indicators are still pointing lower, there are signs that stocks may try to bounce and then decide whether to move lower or move back up once again. My bet is on a move lower but as we have seen over the past three months, stocks are staying in a very tight range and remain whipsawing investors with their yo-yo pattern. To start the week off, that yo-yo pattern looks well in place.
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