Monday saw the rally from late Friday, continued. The morning open saw a large jump and then the markets all moved lower until buyers showed up once the indexes appeared as low as they might go for the morning. That sent the indexes higher for several hours. As the markets moved to new intraday highs some selling took place taking the markets off their highs for the day.
Closing Statistics for Mon Feb 12 2018
S&P 500 Index Close
The S&P index ended up 36.45 to 2656.00
Dow Jones Index Close
The Dow Jones ended up 410.37 to 24601.27
NASDAQ Index Close
The NASDAQ closed up 107.47 to 6981.96
Stock Market Outlook – Review of Mon Feb 12 2018
Chart Comments At The Close:
Monday saw the S&P regain the 100 day moving average and close right at it. This left behind a candlestick that is considered to be more bearish than bullish. It often points to the market giving back some of the day’s rally before starting to move higher again.
That means the outlook is still poor for the S&P with the 21 day still falling along with the 50 day. The 100 day is starting to turn lower while the 200 day moving average is still climbing.
Stock Market Outlook review of Mon Feb 12 2018
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative and rising.
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 Jan 31. On Feb 12 the sell signal was still quite strong.
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 signal is negative 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 has a neutral signal in place for the next couple of days.
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 oversold and rising.
Support Levels To Be Aware Of:
2675 and 2620 were light support.
There is good support at the 2550 level.
The S&P has light support at 2480. It also has light support at 2450 and good support at 2425. Below that there is some support at 2400, 2380, 2350. 2300 has the most support at present but would represent a full correction as a drop to this level would be almost 15%.
Stock Market Outlook for Tomorrow – Tue Feb 13 2018
For Tuesday the indicators are pointing to Monday as being a bounce and Tuesday as being the test for bullish investors. The technical indicators point to Tuesday as opening lower, trying to rally, failing and selling lower. However all the movements should be smaller and less volatile than what we have seen over the past week. That means any negative move on Tuesday could be small, especially when compared to the market movements over the last week.
So for Tuesday expect a slightly negative close by the end of trading.
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