On Tuesday the indexes rallied intraday with the S&P almost reaching Friday’s all-time high and the Dow coming within 43 points of reaching 20,000. But by the close of the day only the NASDAQ index set another new all-time closing higher.
S&P Index Close
The S&P index ended the day unchanged at 2268.90.
Dow Jones Index
The Dow Jones closed down 31.85 points at 19,855.53.
NASDAQ Index Close
The NASDAQ closed up 20 points to 5,551,82 for another closing all-time high.
Stock Market Outlook
Stock Market Outlook review of Jan 10 2017
Chart Comments At The Close:
The Bollinger Bands Squeeze I discussed last night is still continuing. Today the SPX reached the Upper Bollinger Band but was rejected and closed back below it. I had expected a better close from the S&P but instead it closed virtually unchanged. This left a neutral candlestick at the close of trading. The S&P is still above all the major moving averages including the 21 days but there are some signs that the Bollinger Bands Squeeze will result in the S&P moving lower.
Support Levels To Be Aware Of:
The market has been trying to build support at the 2250 level. There is light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook: Technical Indicators:
Stock Market Outlook Technical Review Jan 10 2017
Momentum: For momentum I use a 10 period when studying market direction. Momentum is still positive but is continuing to move sideways rather than up or down.
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 sell signal Dec 23 2016. The sell signal had been losing strength but for the past couple of days it has stayed steady and is still flashing the sell signal.
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 but is falling back.
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 is signaling down for stocks and 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 positive but moving sideways signifying no real change in pricing is expected for the index.
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. It is positive and and moving sideways along with other indicators.
Fast Stochastic: For the Fast Stochastic I use the K period of 20 and D period of 5. These are not default settings, but settings I use for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochastic is signaling down and is also overbought.
Stock Market Outlook for Tomorrow – Wednesday Jan 11 2017
For Wednesday Jan 11 2017, the technical indicators now have 3 sell or down signals in place. There are 4 positive signals but all of them are weak and in most cases almost unchanged as they move sideways.
This continues to point to further weakness for stocks on Wednesday. Overall the market looks like it is in limbo waiting for the next earnings period to start and the inauguration of the new President.
For Wednesday we should see more weakness but a flat to slightly positive close is possible.
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