Wednesday saw another big up day for stocks. By the end of the day the S&P came off its best two-day rally since January. The correction is now down just 4.3% from its 52 week high.
Stock Market Outlook Chart Comments At The Close on Wed Jun 5 2019
On Wednesday the index retook the 100 day moving average and closed above it and just below the declining 21 day moving average. The 21 day is showing no signs of turning sideways which would be the next move desired from the bulls.
The closing candlestick is bullish for Thursday.
The Lower Bollinger Band is turning back up while the Upper Bollinger Band continued its decline. This could be signaling a Bollinger Bands Squeeze for potentially next week.
It was the second time in over two weeks that a bullish signal entered the index.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and was unchanged.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Wednesday May 1. On Wednesday the down signal was weaker.
- 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 rising.
- 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 is pointing up for stocks and is moving out of being oversold.
- 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 also is rising.
- 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 back rising indicating higher prices lie ahead.
- 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 Resistance Levels To Be Aware Of:
2950 is resistance
2900 is resistance
2860 is light resistance
2830 is light resistance
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 Jun 6 2019
For Thursday technical indicators are slowing the advance but there is enough strength to continue higher.
The momentum indicator is pointing to weakness for Thursday so we should expect bigger dips.
Despite this, the indicators are showing the market should close positive for a third day on Thursday but a bigger move higher is not expected.