The S&P on Wednesday continued to struggle as more weakness set in. More stats on Wednesday concerned investors over whether the Fed would cut rates at the end of July or would wait until September as indicators still point to strength in the economy which may delay the Fed from cutting rates this month. Investors took profits and the index closed lower again.
Stock Market Outlook Chart Comments At The Close on Wed Jul 17 2019
The index closed below the Upper Bollinger Band again and just above the 21 day moving average. The closing candlestick was bearish for Thursday.
The Bollinger Bands are beginning to see a potential change as the Upper Bollinger Band is turning lower while the Lower Bollinger Band is pushing above the 50 day. There could be a Bollinger Bands Squeeze setting up for next week.
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 and the 100 day continues to move up.
The chart is less bullish for Thursday.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and falling for a third day.
- 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 almost gone 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 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 signal has a down signal in place and is still showing the index as 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 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 also falling.
- 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.
Stock Market Outlook for Tomorrow – Thu Jul 18 2019
For Thursday the index will try a bounce early in the day. It will fail however and the S&P will end the day lower.
MACD is ready to issue a sell signal if the index continues to move lower on Thursday.
At this point, the market is just experiencing weakness that might last a few more days. Overall though the bias is still up once this period of weakness ends.