What Happened Mon Mar 12 2018
Tech stocks continued their advance on Monday which ended with the NASDAQ at another all-time high. The Dow however was weighed down by Boeing, Caterpillar and United Technologies, American Express Company Stock (AXP) and Home Depot Stock (HD) which saw strong enough declines to push the Dow down over 150 points by the close. The S&P however stayed primarily in a tight trading range between 2800 and 2900, losing just 3.5 points by the close.
Closing Statistics for Mon Mar 12 2018
S&P 500 Index Close
The S&P index ended down 3.55 to 2,783.02
Dow Jones Index Close
The Dow Jones ended down 157.13 to 25,178.61
NASDAQ Index Close
The NASDAQ closed up 27.52 to 7,588.33
Stock Market Outlook – Review of Mon Mar 12 2018
Chart Comments At The Close:
The chart continues to point to the S&P remaining in a fairly tight range of 2700 to 2800. The index couldn’t push above the 2790 level today and left behind a neutral candlestick for Tue Mar 13 2018.
The 21 day moving average is continuing to rise. The 50 day moving average is moving sideways while the 100 day and 200 day are still climbing.
A Bollinger Bands Squeeze was forming but appears to have weakened today.
Overall the chart is somewhat bullish for Tuesday for stocks.
Stock Market Outlook: Technical Indicators:
Technical indicators are positive but mixed on Monday.
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive 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 buy signal on March 5. The buy signal is gathering strength at today’s close.
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 but 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.
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 moving lower.
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 positive and rising indicating higher prices are expected.
Support Levels To Be Aware Of:
2710 is light support.
2700 is 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 – Tue Mar 13 2018
Technical indicators tonight are still biased to the upside but are show signs of some stress after the rally last week.
The Slow Stochastic and MACD are both holding buy signals or up signals that are gathering strength.
However many indicators including Momentum, Relative Strength Index (RSI) and the Ultimate Oscillator are positive but turning down.
Tuesday looks like the index may try for the 2800 level but not be able to hold it. We should see a slightly higher close on Mon Mar 12 2018.
The outlook is sideways but keeping an up bias.
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