For Tuesday stocks looked like they would turn lower in the morning and have a bit of a rough go but then push back to close positive in the afternoon by the close. We saw stocks fall in the morning, but the afternoon saw a rally back into the close but stocks stayed lower.
Advance Decline for Mar 3 2015
Volume fell slightly again on Tuesday as just 3,2 billion shares were traded. Down volume took a bit of a commanding lead with 59% of all trades to the downside. Up flume was 39% with just 2%. New lows though fell back despite the selling, to just 26. The drop in new highs was far more dramatic with just 97 new highs. This is a clear signal that investors were selling positions out for profits, which took out the number of new 52 week highs. If investors were even remotely concerned, the number of new lows would be a lot higher.
Market Direction Closings For Mar 3 2015
The S&P closed at 2107.78 down 9.61. The Dow closed at 18,203.37 down 85.26. The NASDAQ closed at 4979.90 down 28.20.
Market Direction Technical Indicators At The Close of Mar 3 2015
Let’s review the market direction technical indicators at the close of Mar 3 2015 on the S&P 500 and view the market direction outlook for Mar 4 2015.
Market Direction Technical Analysis for Mar 3 2014
Stock Chart Comments:
The S&P was sold right from the morning start. It did rally back into the afternoon but the morning saw the 2100 level tested several times and each time it broke slightly and then moved back up. Technically not much damage was done today but the index did close off the afternoon high. As long as 2100 holds the S&P will be fine. The problem is how quickly the S&P retested the 2100 level. Too many tests though and it will fall right through support built up at the level.
The Upper Bollinger Band continued to turn down and the Lower Bollinger Band continued moving higher as stocks shortly may be heading into a Bolllinger Bands Squeeze.
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 but turned lower. Another day of selling and it will turn negative.
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 and today closed at 1.05, nearing a sell signal shortly if the SPX does not move 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 lower today.
Rate of Change: Rate Of Change is set for a 21 period. The Rate Of Change is choppy but continues to signal that the rally can continue.
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 but today it closed with a weak sell signal.
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 down for stocks and is very oversold.
Market Direction Outlook for Mar 4 2015
Technical indicators on Tuesday are starting to support the SPX moving lower in coming weeks. There is though still some strength but overall the outlook looks poor for a quick rebound rally.
The 2100 level has only weak support and can easily break if enough pressure is brought to bear. The selling today quickly took the S&P down to 2100. Another day of selling and the SPX should close below it. While the direction is still up for stocks, the technical indicators are advising that short-term, stocks will be lower on Wednesday.
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