I had expected a slightly lower close on Thursday but instead Apple Stock continued its advance becoming the first listed USA stock to ever reach a market value of $1 Trillion. This brought in more buyers who picked through a wide number of stocks that had been beaten down. The indexes had a decent day on Thursday and closed higher, except for the Dow which closed almost unchanged, losing just 7 points.
Stock Market Outlook Chart Comments At The Close on Thu Aug 2 2018
The S&P ended the day on Thursday still above 2800. The closing candlestick was bullish for Friday. The index fell to the 21 day moving average on Thursday and bounced strongly off of it.
All the major moving averages are still rising but the Lower Bollinger Band has moved up to the 100 day moving average and is preparing to cross above it. The Upper Bollinger Band is turning lower. The likelihood of a Bollinger Bands Squeeze forming up by early next week is high and at present the Bollinger Bands Squeeze looks set to signal a move lower in the index.
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive 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 down signal on Jul 31. The sell signal is weak but still 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 an up signal in place for Friday.
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 is often 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. With the Rate Of Change, prices are rising when signals are positive. Conversely, prices are falling when signals are negative. As an advance rises the Rate Of Change signal should also rise higher, otherwise the rally is suspect. A decline should see the Rate Of Change fall into negative signals. The more negative the signals the stronger the decline. The rate of change signal is rising.
Support Levels To Be Aware Of:
2795 is light support
2745 to 2750 is light support
2725 is light support.
2700 is support.
2675 is light support.
2650 is light support
2620 is light support
2600 is strong support.
There is good support at the 2550 level from where the market bounced back from the recent correction low on Feb 9.
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 – Fri Aug 3 2018
Once again signals have changed. Yesterday no signals were positive. Today only MACD continues to point lower for the index. All the other technical signals have turned around and are pointing higher for the index.
As well the jobs numbers on Friday are expected to be strong and that should assist in pushing the indexes higher.
On Friday then, the indexes should close higher.
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