What Happened On Tue Dec 12 2017
Tuesday saw the S&P and the Dow Jones make new all-time highs once again. The rally was strong at times but faded into the close. The NASDAQ was negative throughout the day and ended the day slightly lower.
Closing Statistics for Tue Dec 12 2017
S&P 500 Index Close
The S&P index ended up 4.12 to 2664.11
Dow Jones Index Close
The Dow Jones ended up 118.77 to 24,504.80
NASDAQ Index Close
The NASDAQ closed down 12.76 to 6862.32
Stock Market Outlook – Review of Tue Dec 12 2017
Chart Comments At The Close:
On Tuesday the S&P moved higher and part way through the day set a new 52 week high before slipping back and close up 4 points. The fading of the rally into the close left behind a neutral candlestick that often signals a down day to follow. The S&P is still just below the Upper Bollinger Band which is bullish. Al the major moving averages are still climbing.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but the give back into the close for the rally left behind a lower signal in momentum for Wednesday.
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 Nov 28. The up signal is continuing to gain strength.
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 for Wednesday.
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 turned more sideways than up or down on Tuesday.
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 and higher again on Tuesday signaling higher prices still lie ahead.
Support Levels To Be Aware Of:
The 2600 is building some light support.
There is good support at the 2550 level which could assist in keeping the index up for December.
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 Dec 13 2017
For Wednesday there is just one negative signal to be concerned with. The momentum signal moved lower on Tuesday which could signal weakness setting in for Wednesday.
Otherwise all the remaining indicators are signaling we could see a bit of weakness slip into the rally on Wednesday morning.
Wednesday is all about the Fed. At 2:00 PM we get the Fed’s decision on interest rates. A quarter point hike is widely expected.
At 2:30 Fed Chair Janet Yellen makes her final appearance at a FOMC press conference.
The Fed meeting and announcement will dominate trading on Wednesday. The market could be weak in the early part of the morning and then mid-morning move sideways. Into the lunch hour and early afternoon I am expecting the market to move higher into the Fed announcement on interest rates. I am expecting the market to be choppy after the interest rate announcements.
Overall the market is expected to end the day higher on Wednesday based on the above technical readings. The Fed announcement should also keep markets higher in anticipation of the Fed’s interest rate decision.
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