What Happened On Mon Dec 18 2017
Monday saw all 3 indexes make new highs once again as enthusiasm for the Tax Reform Bill convinced investors that stocks have a lot higher to move. The NASDAQ moved above 7000 intraday. By the close, indexes were off their intraday highs.
Closing Statistics for Mon Dec 18 2017
S&P 500 Index Close
The S&P index ended up 14.35 to 2690.16
Dow Jones Index Close
The Dow Jones ended up 140.46 to 24,792.20
NASDAQ Index Close
The NASDAQ closed up 58.18 to 6994.76
Stock Market Outlook – Review of Mon Dec 18 2017
Chart Comments At The Close:
On Monday the S&P pushed higher close at the Upper Bollinger Band. The slightly pullback from the intraday high left behind an overbought candlestick that often is followed by a down day or a day when the S&P may close up only slightly or even flat.
All the major moving averages are climbing higher.
Stock Market Outlook review of Mon Dec 18 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and rose on Monday.
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 Nov 28. The up signal was stronger against 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 now positive and moved higher.
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 Tuesday 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 often is the first indicator to show an overbought or oversold signal. The RSI signal is back overbought and moving higher.
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. The rate of change signal is positive and after rising sharply on Monday turned sideways. This is in keeping with the closing candlestick today that points to a possible slight dip on Tuesday for the S&P.
Support Levels To Be Aware Of:
The 2600 is light support.
There is good support at the 2550 level which could assist in keeping the index up for December.
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.
Stock Market Outlook for Tomorrow – Tue Dec 19 2017
For Tuesday we could see a choppy session with the S&P overbought. Investors may take some profits on Tuesday following two days of big gains. Any dip on Tuesday would not signal the end of this rally, just a breather.
The technical indicators remain bullish for the week. For Tuesday then we could see the S&P turn sideways after several dips intraday but the close should see further gains.
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