Stock Market Outlook for Thu Jun 14 2018 – Short-Term Change To A Lower Bias

Stock Market Summary forWed Jun 13 2018 

Stocks on Wednesday ended the day at their lows following a Fed interest rate increase, but also, perhaps more importantly for investors, confirmation of the Fed’s desire for 2 more interest rate increases this year. That means by the end of 2018 interest rates will be 2.5%. Treasury yields jumped after the rate increase today and the dollar rose into the close of the day.

Closing Statistics

The S&P fell 11.22 to close at 2775.63

The NASDAQ Composite fell 8.09 to 7695.70 after making a new intraday high today.

The Dow Jones Industrial Average fell 119.53 to 25,201.20

Stock Market Outlook Chart Comments At The Close on Wed Jun 13 2018 

Stocks dipped back today and closed below the Upper Bollinger Band for the first time in 6 trading sessions. This left behind a bearish candlestick for Thursday.

All the moving averages are now back climbing and the 50 day is moving above the 100 day which is a bullish signal for stocks.

Stock Market Outlook review of Wed Jun 13 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 May 7. The up signal was pulling back 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 falling.

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 very overbought and issued a sell signal at the close of trading.

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 falling.

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 falling but still positive.

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 Jun 14 2018 

There is a new down signal tonight from the Slow Stochastic. Most of the other signals lost strength today and are turning lower but are not negative.

Despite this, the outlook is for stocks to stay under pressure on Thursday. Stocks should open lower, try a rally and then, based on the technical indicators, close lower than they closed on Wednesday. The underlying trend which is to the upside, is still intact but the market looks set to take a break from the recent rally, on Thursday. For Friday though, stocks should move back higher.

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