What Happened On Tue Jan 23 2018
The Dow was negative part of the morning but the S&P moved higher within the first 15 minutes, almost reaching 2839. By 11:00 the S&P was above 2840. For the remainder of the day the S&P moved sideways until near the close when there was a slight dip below 2840 and then a sharp rally back to close at 2839.13 for a gain of 6.16 on the day.
Closing Statistics for Tue Jan 23 2018
S&P 500 Index Close
The S&P index ended up 6.16 to 2839.13
Dow Jones Index Close
The Dow Jones ended down 3.79 to 26210.81
NASDAQ Index Close
The NASDAQ closed up 52.26 to 7460.29
Stock Market Outlook – Review of Tue Jan 23 2018
Chart Comments At The Close:
Tuesday saw the S&P close once again at the Upper Bollinger Band. This is the 14th closing at the Upper Bollinger Band. The closing candlestick is bullish for Wednesday although in a less “bullish” market it would be also seen as a signal that the day could start with weakness as the market is extremely overbought.
All the major moving averages are still climbing.
Stock Market Outlook review of Tue Jan 23 2018
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and moving sideways.
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 Jan 4. That buy signal gained more strength on Tuesday It is now at the best readings in more than 3 years.
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 is extremely overbought and has an up signal in place.
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 also extremely overbought and 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. The rate of change signal is positive and rising continuing staying at its best readings since July 2016.
Support Levels To Be Aware Of:
2675 and 2620 are light support.
There is good support at the 2550 level.
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 almost 15%.
Stock Market Outlook for Tomorrow – Wed Jan 24 2018
Again, to point out, in a “normal” market the day would start weak on Wednesday as the market is now extremely overbought. That may not however be the case as dips continue to be snapped up and stocks are still pushed higher.
The text we can say tonight is that the market is extremely overbought but is still set to move higher on Wednesday. If we do see some weakness on Wednesday, it would definitely be more in keeping with a very overbought market. However this evening that still seems unlikely for Wednesday.
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links
IWM ETF Russell 2000 Fund Info
Market Direction SPY ETF 500 Fund Info