Stock Market Summary for Wed Jun 6 2018
I had expected some weakness on Wednesday and then a higher afternoon and close. The morning did see a bit of weakness but by 11:00 AM the S&P was already climbing. By the close the S&P was just 8 points away from 2780. All the indexes closed at their highs for the day. The NASDAQ set another new closing high.
Closing Statistics from Wed Jun 6 2018
The S&P climbed 23.55 to 2772.35
The NASDAQ Composite rose 51.38 to close at 7689.24
The Dow Jones Industrial Average climbed the most of the three indexes, up 346.41 to 25,146.39 for a 1.4% gain.
Stock Market Outlook Chart Comments At The Close on Wed Jun 6 2018
The S&P closed above the Upper Bollinger Band. This is a sign of strength and of the market entering being overbought.
The closing candlestick is bullish but also shows the SPX as overbought.
The 50 day moving average is still trending below the 100 day but is rising. The 200 day is rising.
The Lower Bollinger Band has moved above the 50 day and is preparing to climb above the 100 day moving average. This will be another bullish signal.
The Bollinger Bands are starting to form a Bollinger Bands Squeeze which could possibly send stocks higher into June.
Overall the index chart is strongly bullish to push higher and probably retake 2795 this week. 2800 could be reached early next week.
Stock Market Outlook review of Wed Jun 6 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 May 7. 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 has a strong up signal in place for Thursday and shows the S&P as overbought.
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.
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 rising.
Support Levels To Be Aware Of:
2745 to 2750 was 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 7 2018
There are no negative technical indicators or signals again at the close on Wednesday. The candlestick shows the S&P is overbought or entering being overbought so we should expect some weakness which we may see in the early morning on Thursday.
Overall the S&P will be higher again on Thursday.
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