Thursday saw the S&P and the Nasdaq set new all-time highs. The Dow ended the day within a few points of reaching its all-time high. The market moved higher through much of the day building on Wednesday’s rally following the Fed’s minutes.
S&P Index Close
The S&P index ended the day up 10.68 points to close at 2415.07
Dow Jones Index Close
The Dow Jones ended up 70.53to close at 21,082.95
NASDAQ Index Close
The NASDAQ closed up 42.24 points to end the day at 6205.26
Stock Market Outlook
Chart Comments At The Close:
Thursday’s close saw the S&P reach the Upper Bollinger Band. This is the fourth day above the 21 day moving average and the 6th day of the rally. All the major moving averages are moving higher. The potential for a Bollinger Bands Squeeze has ended as you can see that the Upper Bollinger Band and Lower Bollinger Band are moving away from each other.
Stock Market Outlook review of May 25
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and continuing to climb.
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 on May 17 2017. Today MACD issued a buy signal. We need a confirmation before indicating the buy signal is legitimate. This could be signaling a break out of the recent trading range the S&P has been stuck in.
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 as it nears 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 has an up signal 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 but continuing to move sideways which indicates no large move higher or lower is expected.
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 into an oversold signal.
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 – Fri May 26 2017
For Friday the technical indicators are all pointing to higher prices still ahead for the S&P. MACD has a buy signal in place but we need confirmation. For Friday, since we are heading into a long weekend, we could see the market take a small dip during the day and then end the day flat to slightly positive or slightly negative. No big change is expected. Next week though looks like the market could head higher on Tuesday, especially if we get the buy signal from MACD confirmed on Friday.
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