On Tuesday, all 3 indexes reached new intraday and closing highs. The market though is definitely overbought.
S&P 500 Index Close
The S&P index ended up 5.46 to 2534.58
Dow Jones Index Close
The Dow Jones ended up 84.07 to 22,641.67
NASDAQ Index Close
The NASDAQ closed up 15.00 to 6531.71
Stock Market Outlook
Chart Comments At The Close:
The S&P on Tuesday closed at the Upper Bollinger Band for the second day. This is also the sixth straight day of the advance. The closing candlestick on Tuesday is bullish for Wednesday.
The 21 day is continuing to climb. The 50 day is now starting to move higher which is bullish for the rally.
The 100 and 200 day moving averages are continuing to rise which is bullish.
The Bollinger Bands Squeeze is over before it began as the Lower Bollinger Band is pulling back and the Upper Bollinger Band is rising. This indicates there is more upside ahead for the S&P Index.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and rising.
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 Aug 31. The buy signal was stronger on Tuesday.
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 is positive and overbought.
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 an up signal in place and is extremely 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 overbought.
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 not climbing but now trending sideways which indicates no strong changes in prices are expected.
Support Levels To Be Aware Of:
The S&P is trying to build support at 2480. It has light support at 2450 and good support at 2425. There is also light support at 2400, 2380, 2350 and 2300.
Stock Market Outlook for Tomorrow – Wednesday Oct 4 2017
For Wednesday the S&P is now very overbought. We should expect some weakness throughout the day and probably some negative dips in the index.
Overall though we should still see a slightly higher close on Wednesday, marking a seventh day of gains for the S&P. Trading though will be choppy.
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