Investors on Friday ignored the weakness seen over the past couple of trading days and focused instead on the spectacular earnings from Alphabet, Amazon, Microsoft, Intel and others. They sent the S&P and NASDAQ to new all-time highs. The NASDAQ had its best one day gain in a year.
S&P 500 Index Close
The S&P index ended up 20.67 to 2,581.07
Dow Jones Index Close
The Dow Jones ended up 33.33 to 23,434.19
NASDAQ Index Close
The NASDAQ closed up 144.49 to 6701.26
Stock Market Outlook
Stock Market Outlook review of Oct 27 2017
Chart Comments At The Close:
The S&P on Friday push above the Upper Bollinger Band in a show of strength. The closing candlestick was bullish for Monday.
The Upper Bollinger Band is still falling and the Lower Bollinger Band is rising, often a signal as the S&P is entering a Bollinger Bands Squeeze. Right now the squeeze looks set to send the S&P to new highs.
All the major moving averages are continuing to rise which is bullish.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is back 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 sell signal on Oct 24. The sell signal was weaker on Friday and could turn positive at the start of the week if the S&P moves up.
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 is positive, and spiked higher on Friday..
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 issued an up signal on Friday.
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 often is the first indicator to show an overbought or oversold signal. The RSI signal is rising rapidly.
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. The rate of change signal is positive and back climbing.
Support Levels To Be Aware Of:
The S&P has light support at 2480. It has light support at 2450 and good support at 2425. There is also light support at 2400, 2380, 2350 and 2300.
Stock Market Outlook for Tomorrow – Monday Oct 30 2017
Technically the S&P is working its way back to being overbought. The indicators though are overwhelmingly positive. Only MACD has a sell signal in place.
They could be some weakness on Monday and even sideways action, as investors prepare for the tax bill which is expected by mid-week. But even if the market should be weak on Monday, the outlook has a moved back to a bias to the upside following Friday’s big spike higher.
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