Stock Market Outlook for Wed Apr 24 2019 – New Highs

Tue Apr 23 2019 finally saw most stocks break higher sending the S&P to a new all-time high and sending the NASDAQ within a handful of points of breaking the all-time high.

The Dow meanwhile still has 295 points before reaching its all-time high.

Stock Market Outlook Chart Comments At The Close on Tue Apr 23 2019 

The S&P closed above the 21 day moving average but this time left behind a bullish candlestick for Wed Apr 24 2019.

The Bollinger Bands Squeeze has ended with the index moving higher. However the Lower Bollinger Band is starting to rise again so this needs to be watched to make sure the index does not enter another Bollinger Bands Squeeze. At present there are no signs of this developing.

All major moving averages are back where they belong and the 50 day and 100 day are both moving away from the 200 day.

The S&P is stronger but it has been a grind higher, to finally break the old closing high.

Stock Market Outlook review of Tue Apr 23 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and back rising.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tuesday April 2. MACD issued a weak down signal on Thursday and another weak down signal on Monday but neither was confirmed. On Tuesday the index turned back to a positive signal and continued the original signal from April 2, namely up.

• Settings: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9. 

Ultimate Oscillator: The Ultimate Oscillator signal is positive and rising.

• Settings: 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.

Slow Stochastic: The Slow Stochastic has a new up signal in place and is overbought.

• Settings: 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.

Relative Strength Index: The RSI signal is rising.

• Settings: 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.

Rate of Change: The rate of change signal is rising indicating higher prices lie ahead.

• Settings: 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.

Support Resistance Levels To Be Aware Of:

2900 is strong resistance

2860 is light support

2830 is light support

2800 is strong support

2795 is light support

2745 to 2750 is light support

2725 is light support

2700 is light support

2675 is light support

2650 is support

2625 is light support

2600 is support.

There was good support at the 2550 level which is back to being support.

The 2500 level is support.

The S&P has light support at 2480 and better support at 2450.

There is 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 of 641 points as a drop to this level would be 21% and just 5% away from a full bear market signal ending the bull market from 2009.

 Stock Market Outlook for Tomorrow – Wed Apr 24 2019 

After a new closing high, the morning will probably open higher and then dip back to retest the 2930 level. That though will be an opportunity to get into some trades as the outlook is still for more new highs in both the S&P and the NASDAQ indexes.

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