Wednesday saw stocks drift with the indexes closing almost flat but there were a number of notable stocks. Hertz which had just shot higher the day before following excellent earnings, drop back losing 7% in a single day. Molson Coors Brewing Stock (TAP) fell 3% to close down $2.22 at $66.58 and Magna presented disappointing earnings and fell 8% to $54.39 which is not it’s 52 week low. Disney fell 2.2% on good earnings the did not meet estimates, closing at $113.98. Oil was lower on global trade fears and new sanctions were put in place against Russia. Meanwhile China retaliated on the continuing tariff war. So even with the markets trending rather flat, there was a lot happening in the background on Wednesday.
Stock Market Outlook Chart Comments At The Close on Tue Aug 7 2018
The S&P ended the day on once again at the Upper Bollinger Band but as there was no change in the closing numbers, this left behind another bearish candlestick for Thursday.
All the major moving averages are still climbing but you can clearly see the Bollinger Bands Squeeze formed by the Lower Bollinger Band now up to above the 50 day moving average. The Bollinger Bands Squeeze at present is pointing to higher prices for the indexes coming out of the latest Bollinger Bands Squeeze.
Stock Market Outlook – review of Wed Aug 8 2018
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and 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 Mon Aug 6 2018. The up signal continued to climb 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 and is overbought.
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 in place for Tuesday and is overbought.
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 and overbought.
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 moving lower for a second day indicating that a dip in prices may occur.
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 – Thu Aug 9 2018
The technical indicators are still quite strong and more are flashing overbought signals.
The Rate Of Change is falling which often precedes a dip in stocks indexes so we should be aware prices could slip.
However the strength of the move up is still intact. That means the dips are being bought by buyers.
Thursday should see a higher open, some selling and then a higher lunch hour and probably afternoon with a higher close to end the day on Thursday. .
Stock Market Outlook Archives
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Morning Investing Strategy Notes for Tue Apr 23 2024
Stock Market Outlook for Tue Apr 23 2024 – Bounce But Lower
Morning Investing Strategy Notes for Mon Apr 22 2024
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Stock Market Outlook for Fri Apr 19 2024 – Deeply Oversold – Bounce Likely – Higher Close
Morning Investing Strategy Notes for Thu Apr 18 2024
Stock Market Outlook for Thu Apr 18 2024 – Deeply Oversold – Bounce Attempt Expected
Morning Investing Strategy Notes for Wed Apr 17 2024
Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt
Morning Investing Strategy Notes for Tue Apr 16 2024
Stock Market Outlook for Tue Apr 16 2024 – Deeply Oversold
Morning Investing Strategy Notes for Mon Apr 15 2024
Stock Market Outlook for Mon Apr 15 2024 – Expect A Bounce
