Yesterday the market direction was consolidating and today Market Direction started out slow and tested to be sure there was support and then spent the rest of the day pushing higher and closing at the highs for the day. The NASDAQ did not join in but still managed to close positive. The S&P 500 and the Dow closed in new territory. The Dow closed above 15,000 for the first time in its history. While the movement higher in the indexes is exciting it has pushed the market direction into extremely overbought.
Market Direction Chart S&P 500
The S&P 500 5 minute chart below for today shows the open and the test for support within the first half hour. After that the market direction movement was up throughout the entire day. 
The movement at 10:00 AM was a direct result of the Bureau of Labor Statistics which released job openings and labor turnover stats which showed growth yet many unfilled jobs. The report while bullish for the economy points to a continuing paradox. If there are so many job openings why are they not being filled? Businesses complain there are not enough qualified workers with the skills the jobs require. Whatever the issue there appears to be a continuing problem.
Gold Continues To Decline
Meanwhile gold today returned to declining falling $22.60. Many commodities in general are remaining soft and gold looks particularly weak. Gold miners in general may fall back from here.
Market Direction Closings For May 7 2013
The S&P 500 closed at 1,625.96 up 8.46 points. The Dow closed at 15,056.20 up 87.31 points. The NASDAQ closed at 3,396.63 up 3.66.
Market Direction Technical Indicators At The Close of May 7 2013
Let’s take a moment now and review the market direction technical indicators at the close of May 7 2013 on the S&P 500 and view the market direction outlook for May 8 2013.
For Momentum I am using the 10 period. Momentum is still positive but continued to move lower today despite the push higher in market direction. This could be a signal that the market direction is overbought and needs a rest.
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 April 26 and the signal remains valid. The buy signal continues to grow in strength.
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 overbought and almost unchanged from Monday indicating that the market direction up is very overbought.
Rate Of Change is set for a 21 period. Rate Of Change is still positive and up slightly from Monday.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic is extremely overbought but still signals 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 now at the most extreme overbought level it can reach but it still indicates there is more room to the upside. These extreme levels won’t last too much longer.
Market Direction Outlook And Strategy for May 8 2013
The movement higher in stocks today was continuing the push by investors who are convinced that the US economy is better than many analysts believe and getting better. Revenue figures from the majority of companies though does not support this belief. Perhaps next quarter we will see a resumption of better revenue figures but until then the market direction push higher could meet with more resistance.
Indeed the market direction technical indicators while still pointing to higher prices, are also signaling there are stresses developing in the market direction push. Momentum over the past two days is declining not increasing. Both the slow and fast stochastics are extremely overbought and while showing more upside is possible, we should be ready for some sideways movement.
The outlook for tomorrow then is for the market to show weakness from the overbought condition but still push higher.
Internal Market Direction Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links