The big jump on Wednesday followed on the back of a President Trump’s Congressional address Tuesday night. Obviously investors like what they heard and are convinced that the President promises are going to be instituted.
Just as we see with selling, buying also drags in investors and with the indexes roaring higher in the morning, by the afternoon volume was improving. This sent all the indexes into brand new all-time highs.
S&P Index Close
The S&P index ended the day up 32.32 points to close at 2395.96
Dow Jones Index Close
The Dow Jones ended the day up 303.31 points to close at 21,115.55 for a gain on 1.46%, the biggest gain of all three major indexes.
NASDAQ Index Close
The NASDAQ closed up 78.59 points ending the day at 5,904.03 and within easy reach of breaking 6,000 shortly.
Stock Market Outlook
Stock Market Outlook review of Mar 1 2017
Chart Comments At The Close:
The big rally on Wednesday sent the index back to the Upper Bollinger Band but still within it. This is a bullish signal. The index did reach the Upper Bollinger Band intraday but closed just below it. This assists the index for another higher close on Thursday. Normally when an index closes at the Upper Bollinger Band on the day’s high, there is weakness the following morning as investors take profits and readjust positions.
Instead we could see the index continue the advance on a smaller level, right from the open rather than drop back.
All the major moving averages are continuing to move higher and the Bollinger Bands are widening which signals that the rally has further to run to the upside.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and is 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 buy signal Feb 10 2017. The buy signal continues to remain strong.
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 moving sideways. It is 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 a down to neutral signal in place and is 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. The rate of change signal is positive and climbing higher which usually points to higher prices for stocks.
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. RSI is extremely overbought and moving sideways. It is still at readings that almost always signal a pullback or dip should be expected at any time. However the rally probably has enough momentum to move higher before we see the Relative Strength Index (RSI) turn back lower.
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 a neutral to down signal in place and is also overbought.
Support Levels To Be Aware Of:
The market has light support at the 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 – Thursday Mar 2 2017
For Thursday the technical indicators are very overbought. The Fast Stochastic and Slow Stochastic are showing down to neutral more because of being overbought than any other reasons following Wednesday’s big rally.
The Bollinger Bands are continuing to widen which is bullish and the major moving averages are climbing.
While there is always the possibility of a bit of weakness to start off the day on Thursday, any dips will be quickly bought into as the outlook remains for a higher close on Thursday.
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