What Happened On Tue Jan 2 2018
Tuesday saw a rally that set new highs for the S&P and NASDAQ. The NASDAQ closed above 7000 for the first time. Disney stocks led much of the gains following a blockbuster Christmas holiday. The stock moved up 4% to $111.49. Tech stocks also rose with worries about Apple Stock’s throttling process over. Energy stocks led much of the day as cold weather pushed up natural gas prices and concerns over Iran’s unrest weighing on oil prices which rose.
Closing Statistics for Tue Jan 2 2018
S&P 500 Index Close
The S&P index ended up 22.20 to 2695.81
Dow Jones Index Close
The Dow Jones ended up 104.79 to 24,824.01
NASDAQ Index Close
The NASDAQ closed up 103.51 to 7006.90
Stock Market Outlook – Review of Tue Jan 2 2018
Chart Comments At The Close:
The rally on Tuesday left the S&P at a new high and a bullish candlestick at the close. The technical indicators though didn’t change much so we could see some weakness on Wednesday. The Lower Bollinger Band which was moving above the 50 day, a bullish sign, is starting to fall back which could indicate weakness. All the major moving averages are still climbing which is bullish.
Stock Market Outlook review Tue Jan 2 2018
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but unchanged from Friday Dec 29.
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 sell signal on Dec 27 which was confirmed on Dec 28 and remain in place for Wednesday.
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 neutral and 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 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 but still moving lower.
Support Levels To Be Aware Of:
The 2620 is 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 3 2018
The rally on Tuesday to start off the New Year was great to see and could be enough for the expected Santa Claus Rally which has just one more day left.
We could see some weakness on Wednesday as many of the technical indicators remained almost unchanged despite the rally on Tuesday. If there is weakness, it is an opportunity to setup trades as the close should still be positive for the S&P and there is still enough strength to move the index higher this week.
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