Market timing for Monday May 7 after the market closed showed that while there is weakness in the S&P 500 there is also interest among investors in enough stocks at these levels to possibly push the market direction up before more selling may enter the market.

The most telling of my market timing tools is the slow stochastic which while still bearish, has pulled up from Friday’s close. This could mark not so much a change in trend as a change from all the selling. This actually should be expected considering the previous 3 days of selling has pushed the S&P below the low of 1366.82 reached April 24 but again not below the low of April 23, 10 or April 11.

Looking at the Nasdaq a bounce may very well be in order, but unless all the indicators can turn back positive, market direction may turn up for a short while but certainly more selling lies ahead. But a bounce higher in the Nasdaq market will push both the Dow and the S&P higher.

It is important to understand that for the market to regain its footing here, it needs to move back above the highs for this year and then push higher. That is the only thing that can confirm that the market remains bullish.

Market Timing / Market Direction Indicators For May 7 2012

Below are my market timing indicators after the close today.

Market timing indicator momentum went positive near the close today which could support the bounce tomorrow or the next day in the overall market index.

MACD is slightly more negative than yesterday but not by a lot.. As well MACD itself at -0.06 is only slightly negative which could assist a bounce.

The Ultimate Oscillator my favorite market timing tool and it showing not much change after Friday’s big sell-off. This again is a good sign which could suport a bounce at this stage of the selling.

Rate Of Change at -0.17 is negative but only slightly.

Slow stochastic has a better reading than yesterday although still very negative. Despite the negative reading though it does show that momentum to the downside in market direction is slowing which could foretell a bounce is in the works.

Fast stochastic which measures movements a day or two ahead is quite negative with a %D at 51.29 but with today’s ability of the market to hold off from a steep sell-off, it has turned sideways which again could indicate a bounce is in the works.

Market Timing and Market Direction indicators for May 7 2012 show a market perhaps ready to bounce.

Market Timing Indicates A Bounce Up In Market Direction

I believe that unless something totally side-blinds the market, that market direction is ready for a bounce up. While overall my market timing indicators are bearish, the ability of the market to not plunge further today especially with such bad news out of Europe, bodes well for a bounce which could happen as early as tomorrow.