Summary:
The outlook for Wed Apr 4 2018 was for some morning selling and then a rally to a higher close. Indeed the morning open saw a plunge back to 2573 but that was the low for the day. Strength returned as the lunch hour arrived and the afternoon saw volume pick up. By the end of the day all three indexes were considerably higher in what was a spectacular recovery from an early morning plunge caused, once again, by worries over tariffs.
Closing Statistics:
On April 4th (2018) the closing price for S&P 500 was $2644.69. The security opened with a plunge lower but rose to end the day higher by 30.24 points for a gain of 1.16%.
The closing price for the NASDAQ Composite was $7042.11. The security opened lower by 230 points but the index rose all day closing up 100.82 points for a gain of 1.45% and back above 7000.
The closing price for Dow Jones Industrial Average was $24264.30. The security opened lower at 23,523 but regained its composure. It recovered the entire loss and rose 230.94 points to close up 0.96%. All together the index recovered over 700 points from the opening low.
Stock Market Outlook Chart Comments At The Close:
The chart overall remains bearish but is gaining strength. The index closed below the 100 day but well above the 200 days.
That was the major change today.
The close left behind a bullish candlestick for the next trading day.
The 50 day moving average is falling as is the 100 day moving average. Both of these signals are bearish.
The 21 day moving average is turning lower signaling more downside action is expected as it fell below 2700 but is not yet below the 100 day moving average.
The Lower Bollinger Band is starting to turn sideways which is a bullish sign.
The 200 day moving average is still climbing which is bullish.
Stock Market Outlook review of Wed Apr 4 2018
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative 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 sell signal on March 20. That sell signal was weaker at the close on Wednesday.
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 for tomorrow and is only slightly oversold.
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 is negative and unchanged indicating no significant change in prices is expected over the next couple of days.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2710 was light support.
2700 was good support.
2675 was light support.
2650 was light support and 2620 was also light support.
2600 was good support which broke on Mon Apr 2 2018 but remains support for the ongoing rally.
There is good support at the 2550 level from where the market bounced back from the recent correction 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 – Thu Apr 5 2018
The technical indicators continued to improve. The Slow Stochastic has an up signal in place for the second day. The Relative Strength Index (RSI) is climbing quickly as is the Ultimate Oscillator. Even the Rate Of Change is not overly bearish, instead pointing to a sideways day for the next couple of days for prices.
Overall the market has improved greatly, even over yesterday’s numbers. A bottom for now appears to be building.
Thursday should open stronger, dip slightly off the morning open and then move sideways but keep an upward bias. There is a good chance the index will retake 2680 on Thursday and 2700 on Friday. Everything depends on the news on tariffs not spooking investors again. For now the index is set for a higher close on Thursday.
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