Wednesday Feb 14 saw inflation numbers that spooked the markets in the early morning trading but once the S&P refused to fall below 2650 despite repeated testing, the indexes took off. By the close the S&P was back to the 2700 level in another rally that was almost non-stop throughout the day with just small dips along the way higher.
Closing Statistics for Wed Feb 14 2018
S&P 500 Index Close
The S&P index ended up 35.69 to 2698.63
Dow Jones Index Close
The Dow Jones ended up 253.04 to 24,893.49
NASDAQ Index Close
The NASDAQ closed up 130.11 to 7143.62
Stock Market Outlook – Review of Wed Feb 14 2018
Chart Comments At The Close:
Wednesday saw the S&P close at the important 2700 level after bouncing off 2650. The candlestick at the close is actually bearish but often the bearishness doesn’t show for a couple of days. Meanwhile the 21 day moving average continues to fall. The 50 day and now the 100 day are sideways. The Lower Bollinger Band is starting to turn sideways. The Upper Bollinger Band is turning sideways as well. The 200 day is still climbing. Overall the chart is still somewhat bearish but it has improved since Friday’s collapse and rebound.
Stock Market Outlook review of Wed Feb 14 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 14 the sell signal continues to lose strength but it still has a fairly strong sell signal in place.
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 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 has a strong up signal in place still.
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 also rising.
Support Levels To Be Aware Of:
2700 is now resistance.
2675 is light support.
2650 is light support and 2620 is also light support.
There is good support at the 2550 level from where the market bounced back from the recent correction.
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 20% and just 5% away from a potential bear market signal.
Stock Market Outlook for Tomorrow – Thu Feb 15 2018
The technical indicators continue to improve and they are now mixed. There are still some negative indicators but most are rising and the Slow Stochastic has a strong up signal in place. MACD disagrees and has a fairly strong sell signal in place which is being weakened daily as the market recovers lost ground.
Thursday’s outlook is of choppiness as the market pushes through 2700 which is sure to bring out some sellers. That choppiness will result in some dips on Thursday but the bias is to the upside for stocks on Thursday.
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