May jobs numbers released on Friday were well below estimates of 180,000. A total of 75,000 new jobs were created, marking the second time in just 4 months that payrolls were below 100,000. Analysts jumped on the report as proof that the Fed would now have no choice but to lower rates. Investors ran back to stocks pushing stocks higher for a 4th day.
With word on Friday that the Trump administration had reached an agreement with Mexico avoiding impositions of tariffs, the futures all weekend showed a higher open for Monday. Let’s take a look at the technical indicators.
Stock Market Outlook Chart Comments At The Close on Thu Jun 6 2019
On Friday the the index moved above the 50 day moving average and closed just above it. The 21 day is starting to turn higher as is the 100 day and 50 day. .
The closing candlestick is bullish for Monday. There is still one sell signal in play.
The Lower Bollinger Band is still turning up an the Upper Bollinger Band is declining. We could see a Bollinger Bands Squeeze later this week.
Aside from the sell signal, the chart is very bullish.
Stock Market Outlook review of June 7 2019
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 Thursday June 6. On Friday the up signal was confirmed.
- 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 rising and nearing overbought readings.
- 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 signal is still pointing up for stocks and is no longer oversold.
- 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 also is rising and it too is 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 lie ahead.
- 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:
2950 is resistance
2900 is 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.
Stock Market Outlook for Tomorrow – Mon Jun 10 2019
Monday is set to open higher.
The technical indicators have two up signals in place with one being an important up signal from MACD.
The remaining technical indicators are all bullish and are all pointing to a higher day for Monday.
Signals are also showing overbought levels. While Monday will be higher, Tuesday could see the index slip or turn sideways as the market deals with a strong overbought condition.
However with a confirmed up signal from MACD, there is still more upside to the rally for this week.
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