Stock Market Summary for Mon May 21 2018
Monday saw markets recover their footing and move higher. Investors set aside their fears of a trade war with China and focused instead on stocks moving higher. Micron released new estimates going forward and the stock jumped 3.9%. That gave investors confidence to risk more capital and by the close all three major indexes were higher. The Dow Jones Index moved and closed above 25,000.
Closing Statistics from Mon May 21 2018
The S&P rose 20.04 to 2733.01
The NASDAQ Composite rose 39.70 to 7394.04
The Dow Jones Industrial Average rose 298.20 o 25,013.29
Stock Market Outlook Chart Comments At The Close on Mon May 21 2018
The S&P closed higher on Monday at 2733, back above the 2730 valuation.
The big news on Monday was the S&P ending the day above the 50 day moving average which is a major up signal.
The 200 day moving average is still climbing. Overall the chart looks bullish.
Stock Market Outlook: Technical Indicators Review:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and moving sideways.
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. The up signal was still fairly strong 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 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 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 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 rising.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2725 was light support.
2700 is support.
2675 is light support.
2650 is light support
2620 is light support
2600 is strong 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 – Tue May 22 2018
For Tuesday the technical indicators are supporting a move higher for the S&P.
I will be bu8ying the $SPY ETF to the upside on Tuesday.
The morning could open weak but I am expecting stocks to move higher throughout much of the day.
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