What Happened Mon Mar 5 2018
Monday started off weak but then the indexes found their footings and climbed higher. Investors seemed to have decided that President Trump may back down or temper his threats of high tariffs. That was enough to bring investors back to the buy side of stocks. With that, oil rose along with the dollar and indexes closed near their highs for the day. The Dow Jones Industrial Average rose 336.87, or 1.37 percent, to 24,874.93. The Nasdaq Composite rose 72.84 for also a one percent gain to 7,330.71. The S&P 500 gained 29.74 for a 1.11 percent rise to 2,720.99.
Closing Statistics for Mon Mar 5 2018
S&P 500 Index Close
The S&P index ended up 29.69 to 2,720.94
Dow Jones Index Close
The Dow Jones ended up 336.70 to 24,874.76
NASDAQ Index Close
The NASDAQ closed up 72.84 to 7,330.71
Stock Market Outlook – Review of Mon Mar 5 2018
Chart Comments At The Close:
The SPX on Monday closed above the 21 day moving average but below the 50 day. However it came close during the day to reaching the 50 day moving average.
The closing candlestick was bullish.
The 21 day moving average is continuing to fall. The 50 day moving average is starting to turn lower while the 100 day and 200 day are still climbing.
A Bollinger Bands Squeeze is forming which might be seen by mid to end of the week. The Bollinger Bands Squeeze may end up with the SPX moving higher.
Overall the chart is more bullish tonight.
Stock Market Outlook review of Mon Mar 5 2018
Stock Market Outlook: Technical Indicators:
Technical indicators are turning back bullish after Monday’s close.
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative but 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 Feb 23. A new unconfirmed sell signal was seen on Friday Mar 2 but a new buy signal, also unconfirmed, was issued today.
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 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 has a down 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 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 but rising indicating higher prices are expected shortly.
Support Levels To Be Aware Of:
2700 was 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 6 2018
The outlook for Tuesday is more bullish than on Monday.
Technical indicators have begun to switch from bearish signals to bullish ones although some are still negative.
Any drop in markets in the morning near the start of the day, would be considered a trade opportunity as the outlook is for Tuesday to end still higher.
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links
IWM ETF Russell 2000 Fund Info
Market Direction SPY ETF 500 Fund Info