Wed Apr 17 2019 saw the index open higher and then spend the rest of the day slowly grinding lower. The intraday low of 2895 did bring in some buyers and the close was back at 2900. The index continues to show resilience but weakness is growing daily.
Stock Market Outlook Chart Comments At The Close on Wed Apr 17 2019
The S&P closed above the 21 day moving average again on Wednesday but it left behind a bearish candlestick for Thursday.
The Bollinger Bands Squeeze has ended with the index moving higher. Since then the Lower Bollinger Band has not fallen lower and is now turning back up which could signal a new Bollinger Bands Squeeze next week. Normally a second Bollinger Bands Squeeze right after the first ended, is bearish.
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 7 days are still indicating we are going to see a negative day shortly and looking at the chart, that negative day should be tomorrow.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and is falling.
- 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. The up signal was almost gone by the close of trading today.
- 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 falling.
- 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 a new down signal in place and is very 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 also falling.
- 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 falling indicating lower prices are ahead of 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 – Thu Apr 18 2019
The inability of the SPX to push higher has created a short-term pause and the index looks set to pullback a bit on Thursday.
With lower volume expected on Thursday as investors get an early start to the long Easter weekend, we will see a slightly negative close on Thursday. It will not be the end of the rally.
Stock Market Outlook Archives