Stock Market Outlook for Mon Aug 6 2018 – A Little Weakness But Still Higher

Friday saw a slight miss for the jobs numbers but prior months were upgraded and that seemed to be enough to get investors back into buying stocks. The S&P ended the day on Friday Aug 3, higher.

Stock Market Outlook Chart Comments At The Close on Thu Aug 2 2018 

The S&P ended the day on Friday above the 2800 level and above the 21 day moving average. The closing candlestick was bullish for Monday. The index stays above the 21 day moving average and pushed toward the Upper Bollinger Band.

All the major moving averages are still rising but the Lower Bollinger Band has moved up to the 100 day moving average and is preparing to cross above it. The Upper Bollinger Band is turning lower. The likelihood of a Bollinger Bands Squeeze forming up by early this week is high and at present the Bollinger Bands Squeeze looks set to signal a move higher in the index.

Stock Market Outlook review of Fri Aug 3 2018

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 down signal on Jul 31. The sell signal fell to a neutral outlook on Friday for Monday.

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 in place 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 signal is moving sideways indicating no strong change in pricing is expected.

Support Levels To Be Aware Of:

2795 is light support

2745 to 2750 is light support

2725 is light support.

2700 is support.

2675 is light support.

2650 is light support

2620 is light support

2600 is strong support.

There is good support at the 2550 level from where the market bounced back from the recent correction low 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 Aug 6 2018 

The signals are becoming stronger for the upside. MACD has gone to a neutral stance from a sell or down signal.

The Slow Stochastic has an up signal in place for the start of the week.

Overall the index and the technical indicators are bullish for Monday and the start of the week. We could see some weakness, especially mid to late morning but overall the index should close higher.

We should see the S&P push to a new all-time high, early this week.

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