Summary:
On Wed May 9 2018 crude oil prices rose to a 3.5 year high, raising prices for oil related stocks. The dollar dipped slightly but analysts believe it is only a short delay before moving higher. The rally was broad-based on Wednesday and broke through the 2680 resistance level.
Closing Statistics from Wed May 9 2018
The S&P rose 25.87 to 2697.79
The NASDAQ Composite rose 73.00 to 7339.90
The Dow Jones Industrial Average rose 182.33 closing at 24,542.54
Stock Market Outlook Chart Comments At The Close on Wed May 9 2018
The S&P closed above the 100 and 50 day moving average. The 21 day rose to the 100 day and could cross above it on Thursday. All of this is bullish.
The Lower Bollinger Band moved above the 200 day moving average on Wednesday, again a bullish signal.
The closing candlestick is bullish for Thursday. The index is close to the Upper Bollinger Band near the close on Wednesday, again bullish.
Stock Market Outlook review of Wed May 9 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. That 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 signal is up 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
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, the only negative technical signal on Wednesday.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2710 was light support.
2700 was support.
2675 was light support.
2650 is light support
2620 is light support
2600 is good 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 May 10 2018
The outlook continues to remain higher for the index. We could see more dips on Thursday but with so many investors now wanting to jump into the rally, the outlook is up for Thursday. A close above 2700 should be easy for the index, but a dip down to 2680 during the morning should be anticipated. Any weakness remains an opportunity for more trades as the outlook continues to be higher for the indexes.
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