In my weekend’s market direction comments I indicated that the S&P 500 could not dally but had to move higher and quickly to regain the momentum to the upside. With momentum back up, this would draw more investors in and this is what happened on Monday.
Market Direction Action for Sep 9 2013
The market opened with a small gap up. Then the market direction climb stayed steady with the market finally closing near the highs. This was a good day that solidified the 1650 on the S&P 500 and placed the index just above the 1670 and above the 50 day simple moving average (SMA). An excellent day for all the indexes.
Advance Declines For Sep 9 2013
Advancing issues outpaced decliners by a huge margin. 77% of stocks were up while 21& were down. Finally new highs also outpaced the new lows with 189 new 52 week highs versus 104 new lows.
Market Direction Closing For Sep 9 2013
The S&P 500 closed at 1,671.17 up 16.54. The Dow closed at 15,063.12 up 140.62. The NASDAQ closed at 3,706.18 up 46.17.
Market Direction Technical Indicators At The Close of Sep 9 2013
Let’s review the market direction technical indicators at the close of Sep 9 2013 on the S&P 500 and view the market direction outlook for Sept 10 2013.
For Momentum I am using the 10 period. Momentum is back positive although not wildly so. Nonetheless it is pointing to higher gains for the week.
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 today. We need confirmation tomorrow but today’s buy signal was strong and is the first buy signal since the beginning of August.
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 positive and is continuing to climb.
Rate Of Change is set for a 21 period. The rate of change is negative but climbing. This reflects my comments that investors are still cautious but will be drawn in as the S&P 500 climbs and stays above 1670 and then 1680. The rise in the rate of change, although still negative reflects the arrival of more investors.
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. It is no longer oversold.
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 and it too is no longer oversold.
Market Direction Outlook And Strategy for Sept 10 2013
I had indicated on the weekend that Monday would be a pivotal day. It was obvious that Friday hurt the market direction up momentum and bulls needed to regain that momentum quickly. They did that today and now tomorrow they must follow through. We need a good signal from MACD to confirm today’s buy signal.
Overall I think the jump today was overdone due to the Syrian crisis perhaps being resolved without sending in troops or possibly without there even having to be an air strike. But even if it was overdone, the signal from the S&P 500 is that the 1650 level is cleared and now is back supporting the market.
Next the S&P 500 must challenge and break through the 1680 level which could be a lot tougher but I think may be doable especially is there are no strikes against Syria.
With the market direction moving higher today, I won’t be surprised is tomorrow the rise is a lot less and more subdued. The market direction at present though is clearly higher and I am continuing with my strategies as today I bought FEZ and sold LULU Stock puts. I am looking for more opportunities daily.
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