For Monday the outlook was for stocks to show weakness but keep moving higher. By the close of the day all three indexes were higher. The SPX was within a couple of points of the all-time record. The Dow Jones closed at an all-time high and the high for day. The NASDAQ moved up to close above 5000 for the first time in 15 years.
Advance Decline for Mar 2 2015
Volume fell slightly on Monday despite the new highs in the indexes. 3.4 billion shares were traded with 53% of all volume to the upside. Down volume was 46%. While the volume numbers were close the number of new highs ratio to new lows was not. 152 new 52 week highs were recorded on Monday versus 34 new lows.
Market Direction Closings For Mar 2 2015
The S&P closed at 2117.39 up 12.89. The Dow closed at 18,288.63 up 155.93. The NASDAQ closed at 5008.10 up 44.57.
Market Direction Technical Indicators At The Close of Mar 2 2015
Let’s review the market direction technical indicators at the close of Mar 2 2015 on the S&P 500 and view the market direction outlook for Mar 3 2015.
Market Direction Technical Analysis for Mar 2 2015
Stock Chart Comments:
The S&P fought back today and pushed higher to close within a couple of points of its all-time high. Over the past couple of days I have been indicating that the market trending sideways looked more like profit taking than topping action. Today we may have seen a break to the upside commence. The 50 day, 100 and 200 day moving averages are trending higher and continue to point to further price increases in the index.
The Upper Bollinger Band is starting to turn down and the Lower Bollinger Band is turning up. Stocks may be heading into a Bollinger Bands Squeeze. This needs to be watched.
Support and Resistance Levels:
These are the present support levels.
2100 is very light support. 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 today turned sideways.
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 it continues to drop in strength on Monday despite the push higher.
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, overbought and turned back up today.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is turned up once more and continues to indicate there is more upside to 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 is still overbought and is neutral for stocks a couple of days out.
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 signaling up for stocks and is very overbought.
Market Direction Outlook for Mar 3 2015
For the second day of March the S&P still looks steady and while today’s volume was a bit lighter than Friday’s the advance decline numbers continue to support a move higher for stocks. The market remains choppy but with the VIX Index down to $13.04 at the close, the market appears content to grind higher. Most of the sellinglast week looked more like profit taking than anything else at this point.
The technical indicators are still mixed despite the higher high today. However none of the indicators are negative and pointing lower. Overall the Rate Of Change has been the best performing indicator during the present rally from Jan 30. The technical indicators are pointing to higher valuations as this week unfolds.
For Tuesday stocks may have a bit of a rocky morning but technically stocks look set to close higher.
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