Market Direction Outlook For Mar 01 2013 – Will Statistics Rule

Market Direction today followed the market direction technical indicators with the markets trying their best to push higher but the markets sold off in the last half hour as investors unwound positions heading into March. Despite the softness for the last hour volume remain reasonable and the sentiment is unchanged.

Market Direction Action For Today

The S&P and Dow had decent opening and continued higher throughout most of the day but the Senate vote to uphold the spending cuts and the lack of any kind of resolution at this stage in the budget talks unsettled some investors who decided to unload their positions to end the month. The 5 minute S&P 500 market direction chart below shows the give back into the close. This kind of action won’t have helped the market direction technical indicators for today.

market direction for Feb 28 2013

5 minute chart of market direction on the S&P 500 for Feb 28 2013

Market Direction Closings

The S&P 500 closed at 1514.68, down 1.31 points and the Dow closed at 14,054.49, down 20.88 points. The NASDAQ closed at 3160.19 down 2.07.

Market Direction Technical Indicators At The Close of Feb 28 2013

Let’s take a moment now and review the market direction technical indicators at today’s close on the S&P 500 and view the next trading day’s outlook.

Market Direction technical indicator Feb 28 2013

Market Direction technical indicator Feb 28 2013

For Momentum I am using the 10 period. Momentum is still negative although it is almost neutral.

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) is still negative and the sell signal is still valid. The sell signal has been unchanged for almost the entire month of February.

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 negative and signaling that market direction remains weak.

Rate Of Change is set for a 21 period. Rate Of Change is continue to climb back into positive territory.

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 will be higher into next week.

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 still signaling market direction is up but the selling at the close today but a damper on the rise in the Fast Stochastic. Still, the signal remains up.

Market Direction Outlook And Strategy for Mar 01 2013 (NEXT DAY)

The market direction technical indicators consensus is for stocks to remain resilient but the short-term signals are split with 3 indicating market direction is up and 3 indicating sideways to down.

Market Direction Statistics for the close of February

In today’s comments from Sam Stovall of Standard & Poor’s, he pointed out that in every year since the mid 1940’s when the market direction is up in February, the markets have ended the year higher than they started. This has happened in 100% of the cases for February. It seems then that historically February has some significance with investors. So will statistics rule going forward from here? It certainly looks that way at the moment.

Tomorrow we get a variety of reports covering everything from income to sentiment but right now my outlook remains the same as in this afternoon’s intraday comments. The market direction may weaken a bit tomorrow following today’s selling but just as the market direction technical indicators are mixed, none are pointing to anything major in the way of a pull back. It would appear then that the strategy of Put Selling my favorite stocks continues and my portfolio is growing rapidly now. Market direction remains bullish.

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  • Nate

    Just curious do you think the market direction was really up or just flat in February.  The close on the 28th was the same as the close on the first.  It’s kind of a horse a piece but I thought that statistic was interesting.  

  • Overall the market direction was primarily sideways with a bias to the upside. Thanks for your comments.