Market Direction today took a drop on the news of a twitter posting regarding a bombing of the white house and injuring of the President. It was a hoax but it dropped the indexes like a rock. This was one of those “black swan” type events people speak of but again, market direction up recovered within minutes. The market direction rise today started in Europe which pushed some European indexes up as high as 2.4 percent marking the biggest rally in 8 months for European exchanges.Yet Europe continues to show significant risk of recession and contraction. Investors though are buoyed by their believe that numbers that are coming in from Europe showing a decline in growth will force the European Central Bank to basically print money or provide more liquidity. This is becoming the norm around the industrial world it seems. At some point this must end or so we would think and I have to believe that gold will rally back although today it fell back to $1414.60 an ounce so neither appears to be the case just now and who knows maybe these governments can just print away their troubles. This certainly does give the opinion though, that at some point it will end badly.
Market Direction News
New single-family homes rose 1.5 percent in March which met expectations. Netflix stock today closed up 24.44% to $216.99 following better than expected revenue and earnings along with more subscribers. Who knows perhaps it will recover to $300. I know I have investor friends who bought the stock at $280 and are hoping it can recover. They just want out at this point. Bank of America was up 3% after being upgraded to overweight by Morgan Stanly and Dupont, a favorite of mine, rose 4.1 percent after doubling its net income and indicated that the outlook for growth is “solid”.
Market Direction and IWM ETF Russell 2000
The Russell 2000 another nice move higher, up 1.58% today but surprisingly it failed to close above the 50 day simple moving average (SMA). It did however close at the 50 day simple moving average (SMA) so perhaps tomorrow it will break back above it.
Market Direction Closing For Apr 23 2013
The S&P 500 closed at 1,578.78 up 16.28 points. The Dow closed at 14,719.46 up 152.29 points. The NASDAQ closed at 3,269.33 up 35.78 points.
Market Direction Technical Indicators At The Close of Apr 23 2013
Let’s take a moment now and review the market direction technical indicators at the close of Apr 23 2013 on the S&P 500 and view the market direction outlook for April 24 2013
For Momentum I am using the 10 period. Momentum is back positive which is a good sign for market direction.
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 Monday April 15 and that signal is still active. MACD though turned up sharply today but remains negative.
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 back positive for the second day but almost unchanged from yesterday.
Rate Of Change is set for a 21 period. Rate Of Change positive and climbing indicating there was some conviction from investors that the market direction is higher.
For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic has generated a buy signal and indicates the market direction is higher.
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 issued a buy signal and is indicating that tomorrow market direction will continue to climb.
Market Direction Outlook And Strategy for Apr 24 2013
The market direction outlook for Wednesday is for more push to the upside. That could though be halted by Apple Stock. While Apple Stock earnings met estimates, it only did so because the earnings had been downgraded many times over the past 3 months. However the announcement of the dividend increase and the pledging of 60 billion to buy back shares could be enough to put a floor under the stock for now. If that does happen I will expect the market direction to move up tomorrow.
The market direction for tomorrow then is for a slight testing in the morning with a bit of a dip in stocks and then a push to move valuations higher. Many stocks had a good bounce today so how much is left in this push back up is tough to call. With almost a third of all stocks at 52 week highs and revenue often lower than estimated, it is the earnings numbers that is keeping the market from correcting deeper as companies continue to cost cut and do whatever they can to improve their earnings.
Aside from this though my Put Selling strategy will not change until the S&P 500 breaks convincingly into new highs and confirms those highs. Then I will place more capital at risk. Until then I am selling small quantities of puts and continue to take profits early and often while watching market direction move towards the recent all time highs.
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