Summary:
Tue Apr 17 2018 saw stocks continue their advance with both the S&P and NASDAQ gaining more than they did on Monday and the Dow rising another 0.87%.
For the second day earnings seemed to be the biggest impetus for stocks to move higher as Netflix surprised analysts, beating estimates by a wide margin and adding more than 2 million new subscribers in the domestic market.
Before the open on Tuesday, United Health Group announce better than expected earnings and raised their full-year guidance.
Stocks built momentum from the open.
Closing Statistics from Tue Apr 17 2018
The S&P rose 28.55 points to 2706.39 gaining 1.07%
The NASDAQ Composite rose 124.81 points to 7281.10 gaining 1.74%
The Dow Jones Industrial Average rose 213.59 points to 24,786.63 gaining 0.87%
Stock Market Outlook Chart Comments At The Close on Tue Apr 17 2018
The chart has changed to bullish after the S&P closed above the 50 day moving average.
While the 21, 50 and 100 day moving averages are still falling, the 200 day is rising. It won’t take much for the other moving averages to start to rise as well.
The index on Tuesday opened above the 50 day and continued to stay above it all day.
The closing candlestick on Tuesday is bullish for Wednesday. The Bollinger Bands Squeeze should be underway in another day. It could see the index push higher.
Stock Market Outlook review of Tue Apr 17 2018
Stock Market Outlook: Technical Indicators Review:
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 buy signal on Apr 11. The buy signal rose on Tuesday.
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 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 and is overbought. There is a possible sell signal developing as you can see in the Slow Stochastic chart this evening.
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 is negative and rising for a second day.
Support Levels To Be Aware Of:
2745 to 2750 was light support
2710 was light support.
2700 is support.
2675 is light support.
2650 is light support and 2620 is also light support.
2600 is good support.
There is good support at the 2550 level from where the market bounced back from the recent correction 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 – Wed Apr 18 2018
The technical indicators are all gaining traction except for the Ultimate Oscillator which turned lower today. This indicates a choppy day should be expected on Wednesday but with all the other indicators rising or positive, the indexes should close higher for a third straight day on Wednesday.
The last two days have seen strong rallies. This is starting to bring more people in from the sidelines. While Wednesday should be higher by the close, be prepared for a choppy day which at times will see the index turn negative.
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