Yesterday it was all about IBM, North Korea and European jitters that sent stocks lower. Today is was all about an oversold market, better earnings from American Express and CSX among others, that sent stocks back up. The range bound market continues but as you can see in the technical indicators this evening, the short-term sell signal from Wednesday, was confirmed at the close today. Friday should be quite interesting.
Let’s review the closing numbers and then take a technical outlook of the S&P.
S&P Index Close
The S&P index ended the day up 17.67 points to close at 2355.84
Dow Jones Index Close
The Dow Jones ended up 174.22 to close at 20,578.71
NASDAQ Index Close
The NASDAQ closed up 53.74 points to end the day at 5916.78
Stock Market Outlook
Chart Comments At The Close:
Yesterday I discussed the move by the 21 day moving average to below the 50 day. It was not confirmed though until today. Today the 21 day fell deeper and the 50 day rose further above and is now leading the market. Despite the rally in the market today, the short-term sell signal is advising that the market is under pressure. Yesterday I wrote an article on Understanding and Profiting from Short-Term sell Signals. Members know what to make of the fact that we saw a sell signal but the market moved higher today so there is no need to go further on this topic at present.
The 100 day and 200 day moving averages are still climbing but the Bollinger Bands are falling. The Upper Bollinger Band is falling quicker and starting to enter what could be a Bollinger Bands Squeeze. The closing candlestick was bullish today and the S&P closed above the 21 day but below the 50 day moving average.
Stock Market Outlook Review of Apr 20 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum turned positive and looks set to try to climb.
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 Mar 7 2017. The sell signal finally weakened slightly today by the lose.
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 turning positive but still in a sideways pattern.
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 for Friday.
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 and trying to rise.
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 positive and rising.
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 has an up signal in place.
Support Levels To Be Aware Of:
The market has light support at the 2350, 2300 and the 2250 level. There is also light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook for Tomorrow – Friday Apr 21 2017
On Thursday the technical indicators are all starting to show some strength. Two signals turned up, the two stochastic signals.
The MACD sell signal finally weakened today. Overall the signals are all beginning to turn positive and although they are only slightly positive in most instances, they are showing signs they will move higher on Friday.
The outlook for Friday then is for the markets to continue to advance. The NASDAQ could set a new all-time high on Friday as it closed today near its all-time high.
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