The market direction outlook for today was for the markets to stay sideways but with a bias to the upside. Part of the problem today has been the big pullback yesterday afternoon when the indexes gave up half of the day’s gains. There is also conflicting signals on the economy still, although there have always been conflicting signals since I started trading in the early 1970’s. There is also a lot of talk everywhere about an impending crash in stocks this year which is keeping investors on edge. My personal opinion is stocks will see it coming and we will have time to profit from any downside move, but except for an unknown entity that no one saw coming (think May 2010 flash crash), markets always show when problems are beginning to develop if investors are paying attention. Right now I still think the move will be higher for stocks. Let’s take a look intraday
S&P 500 Market Direction Intraday
The one minute intraday chart shows that as I discussed in the members article “before the open” I felt yesterday’s give back of half of the day’s rally would result in selling in the morning. This did but the 1840 level held and this resulted in higher lows. Once the higher lows was in place investors became a bit too exuberant and pushed stocks too high, too quickly which resulted in selling pushing the market back below the all-time high. But the lows failed to break the pattern of higher lows and that resulted in the market direction starting to creep higher again. At 1:20 when writing this article, the market direction looks like it will hold 1840 and try to push to a new closing high.
1840 Remains The Key
The 1840 level is the key to present market rally. Just as 1750 supported the market and held it during the most recent correction, we need to see 1840 be turned from resistance to support. Don’t be surprised if there is more testing of the 1840 level now that the market is back up above 1840. Remember all the headwinds facing the market direction but remember too that this is typical of bull markets. To continue to trade against this market means watching 1840. As long as it holds the direction is choppy but clearly going to be higher.
Market Direction Outlook Into The Close For Feb 25 2014
The outlook into the close for Feb 25 2014 is for the S&P to stay above 1840 and I think it has a good chance of setting a new all-time closing high. It may not be by much and it may be close but overall there is still enough strength among investors for stocks to move up and that’s all the market direction needs to close at a new high either today or tomorrow.