On Thursday investors piled back into stocks, as trade war worries were cast aside, at least for the moment.
Volumes picked up and the NASDAQ made another new all-time intraday and closing high while the S&P came within less than a point of reaching 2800.
Many big name stocks were moving up dramatically such as Amazon, Microsoft, Shopify, Red Hat, PayPal, Facebook and many others.
To the downside L Brands Stock (LB) tumbled 12% on news of disappointing sales. Volume was over 14 million shares traded which is very high for L Brands Stock (LB). It closed at $32.34 nearing its 52 week of of $30.70. It is continuing to trade at levels not seen since 2011. Another big loser was Broadcom Stock (AVGO) which collapsed 13.74% to close down 33.46 to $209.98 on the collapse of the Qualcomm acquisition. However unlike L Brands Stock (LB), Broadcom remains in a longer term uptrend although today’s decline broke through all the major moving averages except for the 200 day moving average. Qualcom stock (QCOM) meanwhile, closed up 1.78% to $58.32.
Stock Market Outlook Chart Comments At The Close on Thu Jul 12 2018
The S&P ended the day on Thursday less than 2 points from breaking through 2800.
All the major moving averages are now rising with the 50 day rapidly starting to climb. We should see a strong move higher in the 21 day by Friday.
The Bollinger Bands are also moving higher.
The closing candlestick on Thursday is bullish for Friday.
The chart is quite bullish for Friday and the start of next week.
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 an up signal on July 9. The up signal was stronger on Thursday.
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 is overbought and neutral on its outlook 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 and also overbought.
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 positive but not rising, instead moving sideways.
Support Levels To Be Aware Of:
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 Jul 13 2018
All the indicators are pointing to a higher day on Friday as the S&P looks ready to break through 2800. Bank earnings start on Friday and only a large miss by all 3 banks can slow the advance of stocks higher.
The S&P should end the day above 2800.
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