Summary:
Friday saw a mixed day with stocks originally rallying and then giving back the early rally. By the close a number of rally attempts failed but the S&P and NASDAQ managed to close with no losses while the Dow Jones closed down just a handful of points.
Closing Statistics from Fri Apr 27 2018
The S&P rose 2.97 points to 2669.91 gaining 0.11%
The NASDAQ Composite rose 1.12 points to 7119.80 gaining 0.02%
The Dow Jones Industrial Average fell 11.15 points to 24,311.19 gaining 0.05%
Stock Market Outlook Chart Comments At The Close on Fri Apr 27 2018
The S&P managed to close at the 100 day moving average. However the close left behind a bearish candlestick to start off the first week of May. Re day moving average is still leading the market, followed by the 100 day and then the 21 day. However the 21 day moving average is starting to turn back up which is a good sign for possibly later in the week. Meanwhile only the 200 day moving average is continuing to rise. The Bollinger Bands Squeeze is also still underway which could potentially send the market up or down.
On Friday by the close there were no clear chart signals to advise that the index was going to move higher or lower to start off the week. Therefore the market direction for Monday is relying on the technical indicators.
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and 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 on Apr 11. The buy signal strengthened 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 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 for Monday.
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 rising.
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 also rising.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2710 was light support.
2700 is support.
2675 is 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 30 2018
For the final day of April, the S&P index looks set to enter a choppy day of trading. Technical indicators are more positive than negative with MACD and the Slow Stochastic holding weak up signals on the market. All the other indicators are positive and trying to climb. There are no technical indicators that are pointing to a lower day for Monday. The only negative indicator for Monday of any consequence is the closing candlestick and often that signal does not appear for a couple of days.
Overall then we should see more weakness on Monday but once again an attempt for a higher close.
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