The outlook for Wednesday was for a mixed day that would end with a slightly lower close. Instead we got a day that was mixed in the morning, saw a rally in the afternoon and then a rapid rise in selling into the last hour of trading and the S&P hit 2111 just shortly after 3:00 PM. Obviously a lot of programmed selling to take advantage of the strong afternoon rally.
Oil rose on Wednesday with news that crude inventories were down slightly. As well a new rumor started today that OPEC nations will probably try again to get an agreement on oil cap production levels. Russia denied the reports but oil moved higher nonetheless. Russia was also the next country following Saudi Arabia and Iran that announced they were preparing to increase oil production rather than curtail it. That news didn’t seem to hurt the price of oil.
Exxon Mobil Stock (XOM)
What is interesting is how strong the recovery in some energy stocks has been. Exxon Mobil Stock which I trade in regularly is near its 52 week high of $90.09 set May 5 2015. During the past 12 months the stock fell below $70 in the panic sell-off in late August 2015 and then back through the $74 support level earlier this year in January and February. Since recovering the $74 valuation the stock is up 17.5% as of the close today. No small feat considering where the price of oil rests and the estimates for the next earnings in Exxon Mobil that have been lowered several times ahead of earnings on April 29 before markets open.
Estimates are that Exxon Mobil will earn 31 cents per share this quarter versus $1.17 for the same quarter last year. Revenue this quarter is expected to be $47 billion versus $67.6 billion. So basically Exxon Mobil drops 20.6 billion of revenue and the stock rises to its 52 week high? As they say, “to live in interesting times”.
Exxon Mobil Stock (XOM) 12 Month Chart to Apr 20 2016
S&P Index Close
The S&P pushed to 2110 during the day but closed up just 1.60 points to 2102.40 by the close giving back most of the afternoon rally.
Dow Jones Index Close
The Dow Jones closed at 18096.27 up 42.67. Late afternoon it was at 18,167.63 and then pulled back in the last hour. However the Dow Jones Index did not give back as much of the rally as the S&P did.
NASDAQ Index Close
The NASDAQ closed up 7.80 points although late afternoon it was at $4969 before closing at 4,948.13.
Stock Market Outlook – Advance Decline Numbers
Volume rose another 260 million on Wednesday with 4.15 billion shares traded. Much of the rise in volume was caused by the late day selling. Volume to the upside was 62% by the close although it was much higher before 3:00 PM. There were only 114 new highs by the close but just 4 new lows.
The NASDAQ traded 2 billion shares with 50% of all volume to the upside and 48% to the downside. Advancing issues still were ahead 52% to 43% for declining issues. As well new highs out distanced new lows with 56 new highs versus 18 new lows.
The increase in volume from sellers, mixed with the lack of rising new highs is an indication of the markets being overbought and investors remaining nervous. This could be a signal that stocks will be under pressure on Thursday.
Special Commentary For Members
The rest of tonight’s stock market outlook is for FullyInformed members, It has been expanded to include a number of topics, some trading tips for the next couple of days and includes 5 trade ideas for Thursday.
Members Only Stock Market Outlook Special Commentary for Apr 21 2016
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