Stock Market Outlook for Wed Jun 26 2019 – Weakness and Lower

Stock Market Outlook - Weakness

Tuesday opened weak and saw the biggest decline for the month. Investors were given conflicting “stories” by the Fed which seemed to suggest that expectations for a July rate cut were not well founded and probably would not occur. This gave investors the signal they needed to take profits in many stocks that had lead the rally higher. The S&P closed down 28 points at 2917, almost at the low of the day.


Stock Market Outlook Chart Comments At The Close on Tue Jun 25 2019 

The index closed below the Upper Bollinger Band but above the 50 day moving average.  The closing candlestick was bearish for Wednesday.

The upper Bollinger Band and the Lower Bollinger Band are still both moving away from each other. This normally indicates a larger move higher should be expected.

There is still one sell signal in play but the 21 day is still turning higher and should move above the 50 day this week which will negate the sell signal.

All the moving averages are climbing and the 200 day is almost ready to cross above the 2800 level which will be bullish.

Stock Market Outlook review of Tue Jun 25 2019


Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and falling indicating weakness for Wednesday.

  • 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 weaker on Wednesday.

  • 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 negative and 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 has a down signal in place. The technical indicator is showing the market as still 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 is falling and no longer 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 falling indicating lower prices should be expected.

  • 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 light support

2860 is better 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 26 2019 

For Wednesday the technical indicators are showing signs of further weakness but also a weakening of the overbought signal.

The readings are however still pointing to further weakness on Wednesday and a probable lower close. However the large decline on Tuesday should not be repeated on Wednesday.


 

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