Summary:
Mon Apr 16 2018 saw stocks push higher but run repeatedly into sellers above 2675. The move above 2680, was repeatedly beaten back as sellers arrived to take profits.
Closing Statistics from Fri Apr 13 2018:
The S&P rose 21.54 points to 2677.84 gaining 0.81%
The NASDAQ Composite rose 49.64 points to 7156.29 gaining 0.70%
The Dow Jones Industrial Average rose 212.90 points to 24,573.04 gaining 0.87%
Stock Market Outlook Chart Comments At The Close on Mon Apr 16 2018
The chart overall is still bearish but showing some improvement.
The index moves above the 100 day and attacked the 50 day but found sellers eagerly awaiting. Every attempt to push beyond the 50 day was pushed back by determined sellers. By the close the index was below the 50 day but above the 100 day.
Meanwhile the action on Monday looked bullish but the closing candlestick is bearish, often signaling a reverse of the up move, so we will have to be on the watch on Tuesday.
All the index except the 200 day are falling. The 50 day could break below the 100 day this week unless the index starts to recover the 2700 level shortly. Meanwhile a potential Bollinger Bands Squeeze may be starting to form.
Overall the day was good, but there remain lots of signals that the next day may not move higher.
Stock Market Outlook review of Mon Apr 16 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 a buy signal on Apr 11. The buy signal rose on Monday/
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 climbing.
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 and is 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 is negative and rising.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2710 was light support.
2700 was good support.
2675 was light support.
2650 is light support and 2620 is also light support.
2600 is good support.
There is good support at the 2550 level from where the market bounced back from the recent correction 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 – Tue Apr 17 2018
The technical indicators are starting to look a lot better after Monday’s rally higher. There are though nagging signs of a potential pullback on Tuesday.
Sellers are constantly stalling the rally which means it will be an uphill battle to break above 2700.
Tuesday could end negative, but based on the strength seen on Monday, despite low volumes, I am going to pick positive for the close on Tuesday, but there will be dips, choppy action and we could see the VIX Index climb a bit as well.
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