The market direction outlook for Thursday was for some weakness but the market to push higher into the close. There definitely was weakness today as investors were back worrying about the Fed and when and by how much they would be tapering. But the close didn’t see any positive outcome although a short rally did push the index higher at the close but still down 2.49 for the S&P and 64.93 for the Dow. The NASDAQ however finished up. Let’s take a look.
Market Direction S&P 500 Intraday For Jan 16 2014
Below is the 1 minute chart from today’s S&P 500. You can see one important aspect to today’s trading action, namely the S&P failed to break below 1840. Once the S&P made a late morning low the market spent most of the day moving higher and into the close the S&P pushed up to match the morning rally high.
Advance Declines For Jan 16 2014
Advancing issues once more outpaced decliners. 56% of stock advanced while 41% declined. Meanwhile the new highs were down slightly to 206 and new lows up slightly to 81.
Market Direction Closings For Jan 16 2014
The S&P closed at 18445.89 down 2.49. The Dow closed at 16,417.01 down 64.93. The NASDAQ closed at 4218.69 up 3.80 and once again today lead the market.
The IWM ETF closed at $116.34 up 14 cents at another new all-time high intraday of 116.38.
Market Direction Technical Indicators At The Close of Jan 16 2014
Let’s review the market direction technical indicators at the close of Jan 16 2014 on the S&P 500 and view the market direction outlook for Jan 17 2014.
The most important support line in the S&P 500 is still at 1750. That support line is holding the market direction up at present and that has not changed. The second support level of 1780 is light support followed by third band of even lighter support at 1800. There is a growing band of support developing for the market at the 1825 level. It is not as strong as resistance at 1840 but there are more investors picking up stocks each time the S&P has trouble around the 1825 level. With the market now above 1840, it held there today which is a good sign for the market to try to push higher.
For Momentum I am using the 10 period. Momentum has been the best indicator over the past two months, replacing MACD as the most accurate indicator. Momentum moved back up today and is once again positive.
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 8 2014 which was confirmed on Jan 9. The market push higher today and the reading is now a mild negative 64.
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 positive today.
Rate Of Change is set for a 21 period. The Rate Of Change is positive for the 19th day and has turned sideways indicating some nervousness on the part of investors.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is still signaling that the market direction is up.
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 to the market direction to be up and it is also signaling an overbought condition.
Market Direction Outlook And Strategy for Jan 17 2014
Today I did some Put Selling. The weakness today also allowed for me to enter a market direction portfolio trade which ended profitably just before the close when the Dow sold off and then rallied back in the closing minutes.
Today was weakness brought about by continued fear over the Fed policies. The advance decline still supports the market pushing higher. Of the technical indicators only one is negative and all the other indicators are positive. The Fast Stochastic is calling for a higher day on Friday as is the Slow Stochastic for early next week. Everything technically still points to a higher day for Friday, but you just can never tell what the Fed will be up to next.
For tomorrow then, aside from any additional fed positioning, the market direction still points to a bias higher for the day.
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