Tuesday saw the markets open the day slightly weak but then talk from the White House on tax reform and repatriation of overseas profits helped spur markets higher. The rally was further spurred by consumer confidence levels reaching 125.6, up from February’s 116.1 which shows consumers feel good about the economy and their prospects. Finally, with earnings for the next quarter starting to be underway, the last quarter turned out to be the best since 2011 for earnings growth. Investors are anticipating better earnings for the upcoming quarter.
Last was the markets themselves sitting deeply oversold after two weeks of light but steady weakness and selling.
S&P Index Close
The S&P index ended the day up 16.98 points to close at 2358.57
Dow Jones Index Close
The Dow Jones ended up 150.52 points to close at 20,701.50
NASDAQ Index Close
The NASDAQ closed up 34.77 points to end the day at 5,875.14
Stock Market Outlook
Chart Comments At The Close:
By the end of the day the rally on Tuesday pushed the index well above the Lower Bollinger Band and back above the 50 day moving average. It is still below the 21 day moving average but should cross it tomorrow.
The end of the day saw a bullish candlestick for Tuesday.
The 200 and 100 day moving averages are continuing to climb. The 50 day is sideways and the 21 day is still moving lower but that should change shortly if the rally can continue.
Stock Market Outlook review of Mar 28 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative but 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 sell signal Mar 7 2017. At the close of trading on Tuesday the sell signal was a bit weaker.
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 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 has an up signal in place from being very oversold.
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 extremely oversold but as explained yesterday, it is at levels where bounces occur and we saw such a bounce today.
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 rising.
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 from being oversold.
Support Levels To Be Aware Of:
The market has light support at the 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 – Wednesday Mar 29 2017
For Wednesday the SPX is set to probably open flat or even slightly down but it should move higher and retake the 21 day moving average in the morning. Once above it, we should see some sideways movement and then a higher close. If the market moves back below 2350 on Wednesday, which is unlikely, it will be bearish.
Right now, the market loutlook is higher still. That means weakness and dips are entry points.
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