Friday’s jobs numbers impressed analysts and investors. while volume did not improve, stocks still roared higher right into the close.
S&P Index Close
The S&P index closed up 32 points to the highest level in 2016 and within a few points of setting a new highs, at 2129.90.
Dow Jones Index Close
The Dow Jones Index rallied hard into the close and moved higher by 250.86 points to push above 18000 again. It closed at 18,146.74.
NASDAQ Index Close
The NASDAQ finally moved to within easy reach of 5000. It moved up 79.95 points on Friday to close at 4956.76.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook: Chart Comments:
The S&P moved to its highest level this year and since July 2015. It closed with reach of breaking to a brand new all-time high. The closing candlestick is bullish but also indicative of a very overbought market.
All the major moving averages are continuing to move higher which suggests this rally can continue.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels. These levels have not changed since January 2015.
2100 is still primary resistance but could be about to become support for the first time in over a year.
2090 is very light support.
2075 is also light support
Below that is 2050 which is light support.
2025 is better support than 2050 through to 2090.
2000 is primary support.
Weak support is at 1970 while stronger support is at 1956 and technically it is more important than 1970 for the market. 1940 is light support as is 1920. 1900 is more symbolic than anything else.
1870 is support. 1840 continues to be support. The 1820 level is light support. The strongest support level is at 1800.
1775 and 1750 are both critical support for the present bull market. While 1775 is important it is 1750 that is the bottom line.
A break of 1750 would mark a severe correction from the all-time high of 2134.72. This would be the biggest correction since the plunge in 2011 of a 20% pullback. A pullback to 1750 from the all-time high would be a drop of 384 points for a decline of 18%. A pull-back of that size would definitely stun investors and bring to question whether the bull market which started in 2009 is finished. From 1750 it is an easy slide to 1600 which was near the market top in 2007.
Stock Market Outlook Technical Signals
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but moving sideways.
MACD Histogram: 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 July 1. The buy signal was stronger on Friday.
Ultimate Oscillator: 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, somewhat overbought and moving sideways.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive and sideways although in general it is more neutral than anything else at present.
Slow Stochastic: For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic tries to predict the market direction further out than just one day. The Slow Stochastic has an up signal in place for Monday and is overbought.
Fast Stochastic: 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 I have it set for daily views. The Fast Stochastic also has an up signal in place for Monday and is also overbought.
Stock Market Outlook for Tomorrow – Jul 11 2016
The technical indicators are all positive but many are signaling that the market is overbought as of Friday’s big spike higher.
An overbought market can continue higher for some time but this market ahead of the next quarterly earnings may turn sideways on Monday.
There are no signs of a strong pullback for the start of the week. Instead the outlook remains positive for stocks for Monday. I would expect the bullishness from Friday to continue Monday in the morning but then start to erode when the enthusiasm for the rally on Friday, ends.
Monday will see some weakness but I am expecting a higher close, even if only a narrow one.
Stay FullyInformed With Email Updates
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links
IWM ETF Russell 2000 Fund Info
Market Direction SPY ETF 500 Fund Info