Wednesday’s market action saw the S&P revisit the 2160 level once again. The recovery this time was not as strong but volumes definitely picked up. This has now become the longest time frame of a low volatility sideways market in more than 10 years.
S&P Index Close
The S&P index lost 5.17 points to close down at 2,170.95.
Dow Jones Index Close
The Dow Jones dropped 53.42 points to close at 18,400.88
NASDAQ Index Close
The NASDAQ loss was small again on Wednesday losing 9.77 points to close at 5,213.22.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook for Aug 31 2016
Stock Market Outlook: Chart Comments:
The SPX closed below the 20 day simple moving average again on Wednesday. During the day the index broke through the Lower Bollinger Band although it closed back above it. This left a bearish candlestick for Thursday. The Bollinger Band Squeeze is tightening again today and showing signs of sending the idnex lower.
All the major moving averages are continuing to climb although the 200 day moving average is starting to turn sideways as the market continues to move sideways.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels.
The market is trying to build some support at the 2180 level. At present this is now resistance.
2160 is very light support.
2150 is support
2125 is light support.
2100 is light support.
2090 is very light support.
2075 is also light support
Below that is 2050 which is light support.
2025 is better support than 2050 through to 2090.
2000 is primary support.
Weak support is at 1970 while stronger support is at 1956 and technically it is more important than 1970 for the market. 1940 is light support as is 1920. 1900 is more symbolic than anything else.
Stock Market Outlook Technical Signals
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative.
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 on August 1. That sell signal was active and almost unchanged on Wednesday.
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 rising.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is neutral to positive.
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.
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 set for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochasticis has a down signal in place.
Stock Market Outlook for Tomorrow – Sep 1 2016
Historically the month of September tends to be the worst month of the year for stocks. The first day of September has been historically poor for stocks.
The techncial indicators are supportive of the market falling lower on Wednesday. While I would not expect too deep a dip, the pattern os pullbacks is biased toward deeper pullbacks developing. This could change next week when volumes should pick up after Labor Day, but for now stocks look set to end the day on Thursday, a bit lower again.
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