Summary:
On Wed Mar 28 2018 ore bad news continued to pound the tech sector. Amazon was the main focus falling to 1386 before climbing back to close down 65 points to 1431 fort a 4.3% loss on the day. NVIDIA Stock (NVDA) continued to decline and closed down 1.85% to $221.35. Aside from the tech sector damage continued to be felt in financials and a wide range of other stocks include Tesla which fell $21.40 to close down 7.6% at $257.78. Rumors swirled around the company on Wednesday as their bonds fell deeper into junk bond status and there were many who spoke of the collapse of the stock altogether. By the end of the day all three indexes were lower but considering the wild swings on Wednesday, losses could have been much higher.
Closing Statistics:
On March 28th (2018) the closing price for S&P 500 was $2605.00 down 7.62. The security opened down, and fell 0.29%.
The closing price for the NASDAQ Composite was $6949.23 down 59.58. The security opened up, and fell 0.85%.
On March 28th (2018) the closing price for Dow Jones Industrial Average was $23848.42 down just 9.29. The security opened up, but fell 0.04%
Stock Market Outlook Chart Comments At The Close:
The S&P closed below the 100, 50 and 21 day moving averages again on Thursday but managed to cling to above the 200 day moving average.
The close left behind a bearish candlestick for Thu Mar 29 2018.
The 50 day moving average is falling as is the 100 day moving average. Both of these signals are bearish.
The 21 day moving average is turning lower signaling more downside action is expected.
The Lower Bollinger Band is falling away from the 100 day moving average which is bearish and marking an end to the recent Bollinger Bands Squeeze.
The 200 day moving average is still climbing which is bullish.
The S&P chart remains bearish.
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative 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 a sell signal on March 20. That sell signal was strong again on Thursday.
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 negative 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 has an up 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 flat.
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 is negative, very oversold and trying to rise.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2710 was light support.
2700 was good support.
2675 is light support.
2650 is light support and 2620 is also light support.
There is good support at the 2550 level from where the market bounced back from the recent correction.
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 – Wed Mar 28 2018
The technical indicators are still very negative except for the Slow Stochastic which is signaling up for stocks.
Thursday could start with a pop higher, but that will be an an opportunity to buy some puts as the outlook is lower by the close on Thursday.
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