Monday Apr 24 2017 was all about France’s election results, a big rally in European equities and promises by President Trump of unveiling a 15% tax plan for businesses on Wednesday. All of this combined to send stocks higher with downtrodden financial stocks leading much of the rally.
Let’s review the closing numbers and then take a technical outlook of the S&P.
S&P Index Close
The S&P index ended the day up 25.46 points to close at 2374.16
Dow Jones Index Close
The Dow Jones ended up 216.13 to close at 20,763.89
NASDAQ Index Close
The NASDAQ closed up 73.30 points to end the day at 5983.82
Stock Market Outlook
Chart Comments At The Close:
The move higher on Monday pushed the index to the Upper Bollinger Band. It left behind though, a candlestick that often is a signal of a reversal. The reversal doesn’t happen overnight, but it is a signal that can occur within a few days so it bears watching since we also have a confirmed short-term sell signal. As to the short-term sell signal, today the 21 day moving average made no advance to retake the lead and move back above the 50 day moving average. Instead the 50 day moving average is continuing to lead the market, which is a bearish signal.
The 100 and 200 day moving averages are still climbing.
The push higher today did push the Upper Bollinger Band to turn higher which could end the possible Bollinger Bands Squeeze that was starting to be entered last week. That is a bullish signal.
SPX Technical review of Apr 24 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum turned positive is still climbing.
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 sell signal Mar 7 2017. An unconfirmed buy signal was issued today at the close.
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 and climbing.
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.
Rate of Change: Rate Of Change is set for a 21 period. This indicator looks back 21 days and compares price action from the past to the present. The rate of change signal is positive and rising.
Relative Strength Index: The relative strength index is set for a period of 5 which gives it 5 days of market movement to monitor. It often is the first indicator to show an overbought or oversold signal. The RSI signal is positive and rising.
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 use for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochastic has an up signal in place.
Support Levels To Be Aware Of:
The market has light support at the 2350, 2300 and the 2250 level. There is also light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook for Tomorrow – Tuesday Apr 25 2017
The technical indicators look a lot stronger after Monday’s rally. Even the MACD indicators which has stayed stubbornly holding a sell signal since March 7 issued an unconfirmed buy signal.
The close saw a possible reversal candlestick being left but that often can take a few days to develop, if at all.
The indicators are pointing to some weakness developing for probably the morning and then more upside action. I am expecting the opening to see a bit of a bounce, then some selling as investors take profits from Monday’s rally. I would expect selling to be shallow but it could be an opportunity to setup some trades as I am expecting the market to move higher into the afternoon.
A lot of analysts are bearish on the rally from Monday and that could be a good thing for the bulls.
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