Stock Market Outlook for Wed Jun 12 2019 – Overbought and Slightly Lower

Stock Market Outlook - Slightly Lower

On Tuesday the S&P opened above the 2900 level. Sellers stepped back in and investors took profits for the rest of the day. By the close the was down just a point. The markets are still overbought.

Stock Market Outlook Chart Comments At The Close on Tue Jun 11 2019 

On Tuesday the index closed above the 50 day moving average but left behind a bearish candlestick for a second day.

There is still one sell signal in play.

The Lower Bollinger Band is still turning up but the Upper Bollinger Band is also staring to turn up. We may not see the anticipated Bollinger Bands Squeeze later this week.

Aside from the sell signal, the chart is very bullish with the major moving averages climbing higher.

Stock Market Outlook review of Tue Jun 11 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and rising.

  • Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thursday June 6. The up signal was stronger again on Tuesday despite the selling.

  • 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 is falling.

  • 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 signal is still pointing up for stocks and is overbought.

  • 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 also is unchanged and it too is overbought.

  • 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 unchanged.

  • 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:

2950 is resistance

2900 is resistance

2860 is light support

2830 is light support

2800 is strong support

2795 is light support

2745 to 2750 is light support

2725 is light support

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.

 Stock Market Outlook for Tomorrow – Wed Jun 12 2019 

Wednesday may start a bit lower and then push higher but run into sellers again.

The indicators are primarily unchanged and MACD is stronger than it was on Tuesday. This points to the market as still having strength to push higher despite the selling.

The bias is still up for stocks but there will be dips on Wednesday and a chance of another flat to slightly negative close.


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