Stock Market Summary for Thu Jun 7 2018
Stocks on Thursday took a break from the ongoing rally. The S&P reached the 2780 level but could not hold or move above it. That commenced selling which lasted the rest of the day. By the close the S&P was almost unchanged down just 1.98 points. The NASDAQ which has been the leader finally took a break from setting new all-time highs. It closed lower by 0.70%. The Dow however, closed up 100 points pushing higher beyond 25,000.
Closing Statistics from Thu Jun 7 2018
The S&P fell 1.98 to 2770.37
The NASDAQ Composite fell 54.17 to 7635.07
The Dow Jones Industrial Average climbed 95.02 to close at 25,241.41
Stock Market Outlook Chart Comments At The Close on Thu Jun 7 2018
The S&P closed above the Upper Bollinger Band for a second day but the closing candlestick is bearish for Friday.
The 50 day moving average is still trending below the 100 day but is rising. The 200 day is also rising.
The Lower Bollinger Band has moved above the 50 day and is at the 100 day moving average.
The Bollinger Bands are starting to form a Bollinger Bands Squeeze which could possibly send stocks higher into June.
Overall the index chart is strongly bullish to push higher. Next week the SPX should reach 2780.
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and moving sideways.
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 May 7. 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 into overbought readings.
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 very overbought and could be ready to issue a down signal on 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 sideways showing no change is expected tomorrow.
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 sideways indicating no change is expected.
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 Jun 8 2018
There are no negative technical indicators but there are sideways signals and the Slow Stochastic could be ready to issue a down signal.
The rally will be on hold on Friday. The day looks a bit choppy with a slightly negative close ahead of the G7 meeting this weekend.
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