Stock indexes on Tue Feb 12 2019 shot higher as new that a potential deal might be made to avoid another government shutdown. For the S&P it was the best day for February and the third best day jump for 2019. For the NASDAQ it was the best day in February and the fourth best day of 2019. For the Dow, it broke a string of losing closes with a strong 372 point jump for a 1.5% increase and left the Dow within easy striking distance of pushing beyond 25,500.
Stock Market Outlook Chart Comments At The Close on Tue Feb 12 2019
The S&P is still bearish with 6 sell signals.
There is still 1 up signal as of Jan 31 when the 21 day rose above the 50 day. The 21 day is continuing to advance and as long as the index doesn’t dip back below 2675, the 21 day should cross above the 100 day and then 200 day probably by the end of the week. The will be two more up or buy signals. Remember, any positive news on trade with China will shoot stocks higher but another government shutdown will send stocks lower.
The 200 and 100 day moving averages are not changing and both are continuing to slowly fall. The 50 day is rising.
The index closed above the 200 day moving average on Tuesday and the closing candlestick is bullish for Wednesday.
The Lower Bollinger Band and the Upper Bollinger Band are turning higher indicating there is more upside ahead for the S&P.
The chart is still predominantly bearish but there continue to be signals that the index can push higher.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and rising. This is bullish.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Fri Jan 4 2019. That up signal was weak on Tuesday but still indicating up. This is bullish.
- 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 was sideways on Tuesday.
- 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 an up signal in place for Wednesday and is still overbought. This is now bullish.
- 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 back rising which is bullish.
- 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. This is bullish.
- 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 was support – this will be strong resistance
2860 was support – this will be resistance
2830 was light support and will be light resistance
2800 is strong resistance
2795 is light resistance
2745 to 2750 is light resistance
2725 is light resistance
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 Feb 13 2019
Today’s rally was strong enough to switch the technical indicators consensus from bearish to bullish for Wednesday. A new up signal also developed in the Slow Stochastic and the rate of change also turned positive which indicates higher prices lie ahead for equities.
For Wednesday there will be some profit-taking but the indexes are set to move higher again and close higher.
Stock Market Outlook Archives
Stock Market Outlook for Fri Apr 26 2024 – Higher and Positive Close
Morning Investing Strategy Notes for Thu Apr 25 2024
Stock Market Outlook for Thu Apr 25 2024 – Weakness and Lower
Morning Investing Strategy Notes for Wed Apr 24 2024
Stock Market Outlook for Wed Apr 24 2024 – Some Weakness But Higher Close
Morning Investing Strategy Notes for Tue Apr 23 2024
Stock Market Outlook for Tue Apr 23 2024 – Bounce But Lower
Morning Investing Strategy Notes for Mon Apr 22 2024
Stock Market Outlook for Mon Apr 22 2024 – No Change – Deeply Oversold Bounce Possible
Morning Investing Strategy Notes for Fri Apr 19 2024
Stock Market Outlook for Fri Apr 19 2024 – Deeply Oversold – Bounce Likely – Higher Close
Morning Investing Strategy Notes for Thu Apr 18 2024
Stock Market Outlook for Thu Apr 18 2024 – Deeply Oversold – Bounce Attempt Expected
Morning Investing Strategy Notes for Wed Apr 17 2024
Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt