Friday saw the markets react positively to the better than expected March jobs numbers.
All 3 indexes closed higher. The S&P is now at the highest level since the start of October 2018 closing at 2892 on Friday.
Stock Market Outlook Chart Comments At The Close on Friday Apr 5 2019
The S&P closed above the 21 day moving average again on Thursday and at the Upper Bollinger Band. It left behind a bullish candlestick for Monday.
The Bollinger Bands Squeeze has ended with the index moving higher.
All major moving averages are back where they belong and the 50 day and 100 day are both moving away from the 200 day.
The S&P is stronger but the candlesticks for the past 4 days are indicating we are going to see a negative day shortly, perhaps as soon as Monday or Tuesday.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and rising.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tuesday April 2. It was gaining strength on Friday.
- Settings: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9.
Ultimate Oscillator: The Ultimate Oscillator signal is positive and rising.
- Settings: 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.
Slow Stochastic: The Slow Stochastic has an up signal in place and is overbought.
- Settings: 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.
Relative Strength Index: The RSI signal is rising and is also overbought.
- Settings: 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.
Rate of Change: The rate of change signal is rising indicating higher prices are coming for equities.
- Settings: 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.
Support Resistance Levels To Be Aware Of:
2900 is strong resistance
2860 is light support
2830 is light support
2800 is strong support
2795 is light support
2745 to 2750 is light support
2725 is light support
2700 is light support
2675 is light support
2650 is support
2625 is light support
2600 is support.
There was good support at the 2550 level which is back to being support.
The 2500 level is support.
The S&P has light support at 2480 and better support at 2450.
There is 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 of 641 points as a drop to this level would be 21% and just 5% away from a full bear market signal ending the bull market from 2009.
Stock Market Outlook for Tomorrow – Mon Apr 8 2019
The S&P should manage to push to 2900 on Monday but it will be choppy.
Monday is setting up to be a choppy day and the index will slip back to retest 2880 for support.
The close though will be higher and dips will be opportunities to setup more trades.
The candlesticks for the past several trading days are indicative of setting up for a negative day or two shortly. This could happen as soon as Monday, but more likely will be seen on Tuesday. 2925 is likely by Wednesday or Thursday.
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Morning Investing Strategy Notes for Thu Apr 18 2024
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