Friday July 31 saw steep declines in a number of stocks but Twitter was the most talked about stock with a loss of 20%.
By the end of a choppy day of trading, all three indexes were lower.
Stock Market Outlook Chart Comments At The Close on Fri Jul 27 2018
The S&P ended the day on Friday at 2819 although during the day it fell to 2808 and was as high as 2843. The big moves on Friday and the lower close left behind a bearish candlestick for Monday.
All the major moving averages are still rising.
The Bollinger Bands are continuing to signal the index will move higher.
The SPX chart is still bullish.
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but 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 an up signal on July 9. The up signal Feb back 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 falling..
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 is overbought and has a down 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 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 signal is positive and moving sideways indicating no great change is expected in pricing.
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 Jul 30 2018
For Monday July 30, the technical indicators have weakened from last week. The Slow Stochastic has a sell signal in place and MACD has lost some of the strength from its up signal. However aside from the Slow Stochastic, technical indicators are still bullish.
Monday will be choppy and there will be dips but at present the technical indicators show there is still plenty of strength despite Twitter and Facebook implosions. Monday could end with slight gains or slight losses but overall the outlook is more sideways than up or down at present.
For Monday then the market has a sideways outlook but is continuing to still have an up bias.
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