Thursday saw the rally continue although it is showing signs of slowing. Some of that slowness though is being caused by investors holding back as they wait for the May unemployment report on Friday. Others are holding back waiting for the NASDAQ to improve.
Stock Market Outlook Chart Comments At The Close on Thu Jun 6 2019
On Thursday the index retook the 21 day moving average and closed above it. The 21 day started today to show signs of turning sideways which could be the start of a move back up for this moving average.
The closing candlestick is bullish for Friday.
The Lower Bollinger Band is turning back up while the Upper Bollinger Band continued its decline. This could be signaling a Bollinger Bands Squeeze for potentially next week.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and rising.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Wednesday May 1. On Thursday MACD issued an unconfirmed up signal.
- Settings: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9.
Ultimate Oscillator: The Ultimate Oscillator signal is rising.
- Settings: 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.
Slow Stochastic: The Slow Stochastic signal is pointing up for stocks and is no longer oversold.
- Settings: 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.
Relative Strength Index: The RSI signal also is rising.
- Settings: 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.
Rate of Change: The rate of change signal is rising indicating higher prices lie ahead.
- Settings: 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.
Support Resistance Levels To Be Aware Of:
2950 is resistance
2900 is resistance
2860 is light resistance
2830 is light resistance
2800 is strong support
2795 is light support
2745 to 2750 is light support
2725 is light support
2700 is light support
2675 is light support
2650 is support
2625 is light support
2600 is support.
There was good support at the 2550 level which is back to being support.
The 2500 level is support.
The S&P has light support at 2480 and better support at 2450.
There is good support at 2425.
Below that there is some support at 2400, 2380, 2350.
Stock Market Outlook for Tomorrow – Fri Jun 7 2019
Friday will primarily be about the May unemployment report.
The technical indicators are bullish and MACD issued an unconfirmed buy signal which is a good sign for the rally to continue next week.
Friday though looks to be not quite as strong as the prior days. We should see weakness on Friday but if the unemployment report meets estimates or exceeds them for job growth, the index will push higher on Friday.
That will create a confirmed MACD up signal for next week.