What Happened On Tue Dec 26 2017
Tuesday was dominated by weakness in chipmakers as well as Apple. While there were losses, they were small and by the close all three indexes remain down only slightly.
Closing Statistics for Tue Dec 26 2017
S&P 500 Index Close
The S&P index ended down 2.84 to 2680.50
Dow Jones Index Close
The Dow Jones ended down 7.85 to 24,746.21
NASDAQ Index Close
The NASDAQ closed down 23.71 to 6936.25
Stock Market Outlook – Review of Tue Dec 26 2017
Chart Comments At The Close:
Two important events occurred on Tuesday. The first is the lower Bollinger Bands is preparing to rise above the 50 day moving average which is usually a bullish signal. The second is the closing candlestick which may look bearish but often is a reversal signal. All major moving averages are moving higher.
Stock Market Outlook review of Tue Dec 26 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but moving lower.
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 almost gone as of the close 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 negative 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 a down signal in place and is overbought.
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 falling.
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 turning lower.
Support Levels To Be Aware Of:
The 2600 is 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 – Wednesday Dec 27 2017
There are signs of weakness growing quickly in the index which can’t be ignored. At the same time the Santa Claus rally should get underway and the closing candlestick on Tuesday is often a reversal which could see the index begin to move higher. The last few trading days the index has been drifting sideways with a slight loss but there remains a lot of strength in the index. We should see the index try to climb on Wednesday but stay aware of the weakness and watch for a sell signal from MACD. Perhaps we won’t see one develop.
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