Stock Market Outlook for Wed Nov 29 2017 – Choppy Bias Higher

Stock Market Outlook - choppy bias higher

What Happened On Tue Nov 28 2017

On Tue Nov 28 2017 comments from Jerome Powell, Fed Chair Nominee to replace Janet Yellen were seen as bullish for stocks and the economy. Financial stocks roared higher as his testimony continued.

As well consumer confidence numbers came in at a 17 year high and there appeared to be progress on the tax reform bill. Despite a mid-afternoon drop in the markets caused by the firing of another North Korean missile, markets marched back higher and all three major indexes and the Russell 2000 small cap index closed at all-time highs.

The bears definitely are perplexed as the markets continue to defy many analysts in their climb to higher highs.

Closing Statistics for Tue Nov 28 2017

S&P 500 Index Close

The S&P index ended up 25.62 to 2627.04

Dow Jones Index Close

The Dow Jones ended up 255.93 to 23,836.71

NASDAQ Index Close

The NASDAQ closed up 33.84 to 6912.36

Stock Market Outlook – Review of Tue Nov 28 2017

Stock Market Outlook review of Tue Nov 28 2017

Chart Comments At The Close:

On Tuesday the S&P had one of its strongest days this year, rising almost 1% and touching another new high. More important, it confirmed the move above 2600. The Bollinger Bands Squeeze that we have followed is ending as you can see in the chart. The outlook is higher out of the squeeze. All the major moving averages are climbing and the closing candlestick was bullish for Wednesday as it broke above the Upper Bollinger Band.


Stock Market Outlook: Technical Indicators:

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 sell signal on Oct 24. Today MACD issued a strong but unconfirmed buy signal.

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 finally moving 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 continues to point higher and is signaling that the market is very overbought. While this needs to be watched, the overbought signals are now going to support more upside action. Dips in the signal are meant to be traded against.

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 rising and entering overbought signals as well.

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 but hardly moved today. That could changed tomorrow but for now it points to prices not seeing a lot of change.

Support Levels To Be Aware Of:

The 2600 level is not support yet but dips back to the 2600 level and especially any drops below 2600 are going to be buying opportunities and may therefore be short-lived.

There is good support at the 2550 level which could assist in pushing the index higher in November.

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 – Wed Nov 29 2017

For Wed Nov 29 2017, the second last day of November, the S&P is set to experience a bit of profit-taking but continue to move higher. It may be a choppier day of trading but for now the outlook is up for the S&P as the technical indicators are all supportive of the move higher.

Therefore any profit-taking dips on Wednesday are opportunities to establish more trades.

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