All three indexes moved higher on Thursday ahead of the May jobs numbers due out before the markets open on Friday. Much of the strength came from the ADP numbers which showed private payrolls in May rose by 253,000, well ahead of analysts forecasts averaging 185,000.
As well, factory activity rose to 54.9 from April’s 54.8 showing expansion in the economy is continuing.
While these reports increased the likelihood of a Fed funds rate increase in June, investors also took them to mean that the economy is expanding, not contracting and stocks, after coming off the best quarter since 2011, appear relatively “cheap” when compared to possible further gains in the next two quarters.
The decision by President Trump to leave the Paris Climate Accord did not damage the market, but if anything seemed to buoy investor enthusiasm as most believe that an end to the Paris Accord for the US will mean better profits for many industries.
By the close of the day, all three indexes were setting new records.
Getting Ahead Of The Fed Strategy Trade From May 24
When I said I was expecting a better day on Thursday in last night’s Stock Market Outlook, I didn’t think we would see all new highs. This certainly helped all those in my Spy Trade Getting Ahead Of The Fed Strategy from May 24. Many investors wrote in after the close today, exciting about their returns so kudos to those who did well. Most beat my returns which were only slightly positive. I sold my calls too early, selling them on May 25. The market had stayed pretty well sideways after May 25 so a lot of investors were still in the call side of this Fed Spy ETF Strategy trade when the market roared higher today pushing the value of the calls . So again, congratulations and thank you for emailing me.
S&P Index Close
The S&P index ended the day up 18.26 points to close at 2430.06 which was the high for the day.
Dow Jones Index Close
The Dow Jones ended up 135.53 points to 21,144.18, also the high for the day.
NASDAQ Index Close
The NASDAQ closed up 48.31 points to end the day at 6246.83 just off the day’s intraday high of 6247.07.
Stock Market Outlook
Chart Comments At The Close:
New charts today as tech support continues to make further changes to the investing tools. There are a lot more advances coming for the tools and they are doing a great job at implementing them. Next week should be a big week for the investing tools.
You can see that the index closed well above the Upper Bollinger Band on Thursday. There are just two levels to watch at present. The 2380 level is light support but it does stretch back easily 3 months so a break of that level would be a fairly good sell signal to advising investors to buy spy puts. The 2350 is stronger support and a break at any time of that level would tell investors to consider further protection to the downside.
All the major moving averages are continuing higher and the 21 day moving average is almost ready to break above the 2400 level. This would be very bullish.
Stock Market Outlook review of June 1 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and rising toward being overbought.
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 buy signal on May 25 2017. The buy signal was strong again 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 is positive and overbought.
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 after the close today. It is also overbought.
Rate of Change: Rate Of Change signal has been dropped at the present time.
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 moving higher and overbought.
Fast Stochastic: For the Fast Stochastic I use the K period of 20 and D period of 5. These are not default settings, but settings I use for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochastic has an up signal in place and is overbought.
Support Levels To Be Aware Of:
The market has light support at the 2380 level, 2350, 2300 and the 2250 level. There is also light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook for Tomorrow – Friday Jun 2 2017
For Friday the market may take a breather or even dip as it is very overbought. However the outlook is still higher for the index. Therefore any dips continue to be opportunities to set up more trades. There is still more upside ahead for the indexes but be aware that a dip could easily occur on Friday, but it will not mark the end of this rally.
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