With the end to the long weekend, Tuesday promises to be an interesting start to the final week of May. So far the losses from last week have been quite small. My Market Direction outlook for Friday was pretty well what happened. The markets sold off at the outset and spent the rest of the day climbing and finally the S&P ended with just a slight loss.
The Sell In May crowd have been wrong so far this year and now with the final week upon the markets it really does not look that bad. The bullish sentiment is not overly strong but strong enough to keep the market direction from correcting. But it is rare when the market direction does not have a correction of anywhere from 5% to 20% in a year and this year we have yet to see any kind of significant correction.
Market Direction and Put Selling Stocks
The recent weakness though has opened up quite a few stocks for Put Selling and I have quite a list of stocks I am watching for next week.
Market Direction Closing For May 24 2013
The S&P 500 closed at 1,649.60 down 0.91 points. The Dow closed at 15,303.10 up 8.60 points. The NASDAQ closed at 3,459.14 down 0.27 points.
Market Direction Technical Indicators At The Close of May 24 2013
Let’s take a moment now and review the market direction technical indicators at the close of May 24 2013 on the S&P 500 and view the market direction outlook for May 28 2013.
For Momentum I am using the 10 period. Momentum is positive but moving sideways for the second day.
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 Friday as expected.
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 moving sideways but back positive.
Rate Of Change is set for a 21 period. The rate of change is positive but sideways.
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 lower.
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 signaling the market direction is down.
Market Direction Outlook And Strategy for May 28 2013
Friday’s recovery was strong and intriguing. The morning opening low retested the previous day’s low. While this may seem arbitrary it could be significant as a retest of the lows could ass some further strength to an attempt to move higher.
The market direction technical indicators though are mixed with the bias still for the market direction to move lower. I worked on a long list of stocks over the Memorial weekend to see which ones could be candidates for Put Selling. I was surprised by how many were sitting well off their highs and in good shape for Put Selling. I will be added more capital into the markets on Tuesday if there is additional selling.
For Tuesday then the market direction outlook is for more sideways movement but with a bias to the downside.
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