The market direction outlook for July 11 was for the market direction to move up substantially. This really was not much of a technical outlook but was based on Bernanke’s comments on Wednesday after the markets closed. Any talk about continuing the Quantitative Easing program is bound to push stocks up. As well his desire to keep the US Dollar down is also good for stocks. It’s a double win scenario for stocks. This kind of manipulation has been ongoing with the Fed since the crash of 2008 to 2009. Today’s big market direction jump then was not overdone but instead was exactly what should be expected at this point in the lengthy rally we have seen since 2009.
Market Direction Spitting Distance
The S&P climbed to within spitting distance of the all time high set back on May 22. This kind of action by the Fed annoys thousands of investors but it is something he has continued to do through the past 5 years. Whenever the market direction looks like it may finally have entered a serious correction, the fed seems ready to step in and push values even higher.
Currency War
Worldwide, governments are struggling to have the “lowest” currency to stoke their exports and economies in general. This “currency war” has been ongoing and relentless for at least 5 years. The Fed is determined to keep the value of the US dollar low and other countries are struggling to win the same game.
Market Direction Closing For July 11 2013
The S&P 500 closed at 1,675.02 up 22.40 and the Dow closed at 15,460.92 up 169.26. The NASDAQ closed at 3,578.30 up 57.55 .
Market Direction Technical Indicators At The Close of July 11 2013
Even with the Bernanke push today, it is worth looking at the market direction technical indicators because there are a number of readings worth discussing. Let’s review the market direction technical indicators at the close of July 11 2013 on the S&P 500 and view the market direction outlook for July 12 2013.
For Momentum I am using the 10 period. Momentum is climbing rapidly and is now overbought but surprisingly, today’s big push higher did not see a large jump in the reading. In fact the reading is only up slightly. This is often the signal that the market direction is about to rest. It is not necessarily going to pull back, but it is often followed by a sideways movement for a few days.
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 buy signal on July 5. The buy signal had a huge jump today in the readings.
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 now overbought and is pointing to higher gains ahead.
Rate Of Change is set for a 21 period. The rate of change is positive. It had a big up day so this tells you that a lot of investors bought into this market today.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is signaling that the market direction is up but it is extremely overbought.
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 indicating that the market direction is up. The Fast Stochastic is into extremely overbought territory.
Market Direction Outlook And Strategy for July 12 2013
Thursday’s market was an obvious call to the upside. Any such comments from the Fed are bound to push stocks higher, so it really was a no-brainer to assume that stocks would move up.
Meanwhile I did Put Selling on a number of stocks and I did a stock trade on Yum Stock. I also did an exceptional Trading For Pennies Strategy trade and last I adjusted the market direction portfolio stop-loss after the markets closed.
What all this activity should tell you is that I am solidly in this market at present. Thr0ugh Put Selling, I am continuing to grow my portfolio but at the same time I am remaining cautious by staying slightly out of the money with my puts.
The Market Direction Technical Indicators are bullish but momentum readings are advising that we could see some sideways action shortly. For tomorrow I am expecting the market direction to continue up but not at the pace we witnessed today. The S&P is at the point of easily breaking the last all time high and that should bring out some selling by investors. Whether the market direction can push beyond the all time high of May 22 on Friday, may depend on revenue and earnings from the big US banks. But if the all time high does not break on Friday it will next week.
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