Friday saw markets trade in a choppy session as geopolitical issues once again grabbed investors’ attention. The day ended lower for all three indexes but most important, the S&P closed above the 2650 level and spent the day defend it.
This should set the index up for a move higher, at least at the start of the week.
Closing Statistics from Fri Apr 13 2018:
The S&P fell 7.69 points to 2656.30 losing 0.29%
The NASDAQ Composite fell 33.60 to 7106.65 losing 0.47%
The Dow Jones Industrial Average fell 122.91 to 24,360.14 losing 0.50%
Stock Market Outlook Chart Comments At The Close on Fri Apr 13 2018:
The chart overall is still bearish but showing some improvement.
The index closed off the low of the day but back below the 50 and 100 day moving averages. It closed at the 21 day moving average. This might setup the index for another bounce attempt on Monday.
The closing candlestick was bearish for Monday. The 50, 21 and now 100 day moving averages are all falling. The 21 day is below the 50 and 100 day moving averages.
The 200 day moving average is not climbing but instead is turning sideways.
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and falling.
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 Apr 11. The buy signal rose on Friday.
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 negative but climbing higher..
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.
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 falling.
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 is negative and trending sideways.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2710 was light support.
2700 was good support.
2675 was light support.
2650 is light support and 2620 is also light support.
2600 is good support.
There is good support at the 2550 level from where the market bounced back from the recent correction 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 – Mon Apr 16 2018
With the Syria missile strike out-of-the-way, investors feel that “one issue” has been dealt with. That may not be the case, at for how that’s the way it is being perceived.
Futures this evening are higher, pointing to an up day for Monday.
The technical indicators are split, but there is some strength that points to an up day on Monday.
Overall I am expecting a still higher close, although dips and some negative readings will be seen on Monday.
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