The S&P on Wednesday broke above the 3000 level briefly, on comments from Fed Chair Powell which strongly suggested a rate cut in July was not “off the table”. Volume picked up as investors jumped into stocks in anticipation of a rate cut this month and an anticipated rally caused by any rate hike.
Stock Market Outlook Chart Comments At The Close on Wed Jul 10 2019
The index closed below the Upper Bollinger Band and above all the major moving averages. The closing candlestick was bullish for Thursday. The Bollinger Bands are both moving higher with the Lower Bollinger Band now above the 100 day moving average. Often this indicates that the next move will be higher for the index.
The buy signal from June 28 with the 21 day moving above the 50 day, is still gaining strength.
The 200 day moving average is moving higher above the 2800 level which is bullish.
The chart is quite bullish for Thursday.
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. The up signal was weaker again on Wednesday.
- 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 moving sideways, unchanged.
- 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 has a down signal in place for Thursday and is still signaling that the market is 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 moving higher.
- 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 unchanged indicating no change in the overall market is expected.
- 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 and Resistance Levels To Be Aware Of:
3000 is resistance
2950 is light support
2900 is light support
2860 is better 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 – Thu Jul 11 2019
For Thursday, investors are anticipating a higher close thanks to Powell’s testimony. Investors get inflation numbers as well on Thursday. Any surprise to the upside could dip stocks bigger than expected.
Thursday will see stocks continue to advance and the S&P should close above 3000.