Stock Market Outlook for Thu Jul 19 2018 – Weakness But Higher

The outlook was for a higher day on Wednesday. The S&P continued its climb flanked by the Dow Index which was up for another straight day.

Stock Market Outlook Chart Comments At The Close on Wed Jul 18 2018 

The S&P ended the day on Tuesday above 2800 and reached 2816 intraday. The close was just below the intraday high.

All the major moving averages are rising with the 50 day continuing to quickly rise.

The closing candlestick on Wednesday was bullish for Thursday although often it signals some weakness on the following day.

The Bollinger Bands are also moving higher.

The chart is overall bullish.

Stock Market Outlook review of Jul 18 2018

Stock Market Outlook: Technical Indicators Review:

Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive 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 an up signal on July 9. The up signal was stronger 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 is extremely overbought and has a neutral signal in place for Thursday.

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 is 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 positive and rising.

Support Levels To Be Aware Of:

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 Jul 19 2018 

Once again on Thursday there are no negative signals. Signals are continuing to move higher but there are more overbought signals developing which reflects growing weakness.

The S&P should try to test 2820 on Thursday and close slightly higher again.

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