Stock Market Outlook for Wed Jun 6 2018 – Weakness But Higher Close Expected

Stock Market Summary for Tue Jun 5 2018 

Tech stocks continued their rally on Tuesday with Apple stock closing at new highs, Twitter jumping 5.1% as it prepares to join the S&P 500, Netflix up 1.1% as it prepares to join the S&P 100 index and Amazon stock up 1.9%.  Retail was mixed with Walmart Stock down 0.94% but Target Stock up 2.82%. Bank stocks were lower.

Closing Statistics from Tue Jun 5 2018 

The S&P rose 1.93 in a choppy session closing at 2748.80

The NASDAQ Composite rose 31.49 to close at 7637.86 a new closing high.

The Dow Jones Industrial Average fell 12.71 to 24799.98

Stock Market Outlook Chart Comments At The Close on Tue Jun 5 2018 

The S&P closed above the 21 day and all major moving averages on Tuesday and near the Upper Bollinger Band.

The closing candlestick is bearish indicating Wednesday could be a weak day for stocks.

The 50 day moving average is still trending below the 100 day but is no longer falling. The 200 day is rising.

The Lower Bollinger Band has reached the 50 day and is preparing to climb above it. This will be a bullish signal.

The Bollinger Bands are starting to form a Bollinger Bands Squeeze which could possibly send stocks higher into June.

Overall the index chart is strongly bullish to push higher and probably retake 2775 by Wednesday or Thursday.

Stock Market Outlook review of Tue Jun 5 2018

Stock Market Outlook: Technical Indicators Review:

Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and 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 an up signal on May 7. Yesterday MACD issued another up signal following a string of down signals. Today MACD confirmed the up signal from yesterday.

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 has a strong up signal in place for Wednesday and shows the market as 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 is often 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. 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. The rate of change signal is falling which confirms the closing candlestick that we could see weakness on Wednesday.

Support Levels To Be Aware Of:

2745 to 2750 was light support

2725 is light support.

2700 is support.

2675 is light support.

2650 is light support

2620 is light support

2600 is strong support.

There is good support at the 2550 level from where the market bounced back from the recent correction low on Feb 9.

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 20% and just 5% away from a potential bear market signal.

 Stock Market Outlook for Tomorrow – Wed Jun 6 2018 

There are no negative technical indicators or signals. Only the closing candlestick is flashing a weakness warning for Wednesday or Thursday.

Wednesday looks like it will be a choppy session. We could see the day start with a jump and then some selling for much of the morning. The close though is still expected to be higher.

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