Market Direction Outlook For Mar 21 2013

Market Direction today was stronger than I would have expected based on the recent concern from investors over the Cyprus issue. However the Fed Chairman’s comments to stay the course on stimulus and interest rates was obviously enough to keep the market direction moving higher. Plus after 2 days of market direction moving lower, investors obviously felt that some stocks had pulled back enough to warrant their buying.

The bears cannot get a break with this market direction and those who bought puts are looking at losses.

Market Direction Closings

The S&P 500 closed at 1558.71, up 10.37 points and the Dow closed at 14,511.73, up 55.91 points. The NASDAQ closed at 3254.19 up 25.09 points.

Market Direction Technical Indicators At The Close of Mar 20 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 Mar 20 2013

For Momentum I am using the 10 period. Momentum is still positive. Today momentum turned back higher.

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 positive but it is still moving lower than yesterday.

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 and overbought but unchanged from yesterday.

Rate Of Change is set for a 21 period. Rate Of Change is still positive and jumped higher today.

For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is overbought and still signaling market direction will be lower early 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 also overbought and still signaling market direction is lower. However the Fast Stochastic is ready to issue a new buy signal if it can move slightly higher tomorrow.

Market Direction Outlook And Strategy for Mar 21 2013

The market direction outlook for the Thursday by general consensus is for the market direction to continue to try to climb. We may see weakness in the morning but overall the majority of the market direction technical indicators are still positive and trying to climb. Only two are signaling market direction is down and MACD while still positive is in need of another positive day tomorrow in the market direction to move back higher. Otherwise it could issue a sell signal if the market direction continues lower.

I am working on a number of longer articles so I do not have too much time for delving deeper into market direction however after today’s performance any selling tomorrow should be muted if there is any. The market direction remains strong and the hopes for a pullback of any size seems to have been put on hold once again. I remain with my capital still Put Selling and looking for opportunities. I will post more tomorrow during the day but market direction still has the bias to more upside.

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  • nono

    Yes, when you look at the OI in SPY puts alone you can see where the ‘market’ is going to move. When there is any sell volume (there was a put closing program running approx Mar 8-14) the VIX whips down to give them the worst possible exit price. These Feb/March puts were bought in Dec & Jan for ‘fiscal cliff’ extended deadline. Now we have two more months of ‘sequester’ protection to slowly expire. SPX P/C is still way bearish.

  • Thanks for your comments. I know I enjoy buying and selling the Spy Put Options a great deal and have since the Spy ETF was started in 1993. With the proper strategy they are highly profitable. Do you have a strategy you use?