Monday saw a rebound bounce with decent numbers and fairly wide spread. With tensions easing with North Korea, investors stepped back into equities, picking through some of the stocks that were beaten up last week. The question after today’s close is whether the market can produce another higher close on Tuesday.
S&P Index Close
The S&P index ended the day up 24.52 to 2465.84.
Dow Jones Index Close
The Dow Jones ended up 136.39 to 21,993.71.
NASDAQ Index Close
The NASDAQ closed up 83.68 to 6340.23.
Stock Market Outlook
Stock Market Outlook review of Aug 14 2017
Chart Comments At The Close:
The S&P had its best one day gain since April of this year with a 1% jump. This placed the S&P above the 50 day moving average and below the 21 day moving average. If you look at past pullbacks you can see that after two days of rallying, normally the market tends to pullback. That means if we don’t see a pullback on Tuesday we should see one on Wednesday.
All the major indexes are climbing higher
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative but moved closer to being positive by the end of the day.
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 on Aug 3. The sell signal is still strong as is the MACD histogram which is the barchart just below the MACD signal lines. This is still quite bearish.
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 rising.
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 still had a sell signal in place but was oversold and trying to turn back up.
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 rising.
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 but trending more sideways than up. Still, it is indicating that prices should not fall much further.
Support Levels To Be Aware Of:
The market has developed light support at 2450 and good support at 2425. There is also light support at 2400, 2380, 2350 and 2300.
Stock Market Outlook for Tomorrow – Tuesday Aug 15 2017
For Tuesday Aug 15 2017 the Stock Market Outlook is negative following today’s big run higher. After a sideways day on Friday and a big rally on Monday, I would expect many investors to take profits which should keep the index from moving higher. I would not expect a big down move but a negative close should be anticipated by investors. That does not mean the rally is necessarily over. We will know more on Tuesday. If the market rallies on Tuesday rather than dipping, I would expect Wednesday to be negative.
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