Thursday’s stock market action was actually quite bullish despite ending the day barely higher, than where the indexes had opened. Tonight’s missile attacks against Syria will most likely impact the markets on Friday. Let’s also not forget Friday is the unemployment report for March. Overall then, seeing the stock markets basically start and end at the same levels shouldn’t be a surprise considering Wednesday’s drop in the markets, Fed minutes pointing to an end in bond buying and a huge reduction in the balance sheet, the unemployment report on Friday and now the attacks in Syria. Friday could be quite the day.
Let’s look at Thursday’s closing numbers and then take a technical overview the trading.
S&P Index Close
The S&P index ended the day up 4.54 points to close at 2,357.49
Dow Jones Index Close
The Dow Jones ended up 14.80 points to 20,662.95
NASDAQ Index Close
The NASDAQ closed up 14.47 points to end the day at 5,878.95
Stock Market Outlook
Chart Comments At The Close:
The end of the day on Thursday had seen the S&P rejected at the 21 day moving average. It closed below it but also above the 50 day moving average. However during the day it had reached the 50 day and then bounced up only to find that the 21 day was filled with sellers. Overall then, it was a flat to negative day, but it left behind a bearish candlestick for Friday. At present the 2350 value is holding the rally together.
Note though that both the Upper Bollinger Band and the Lower Bollinger Band are now falling which is a bearish signal on the market. The 100, 200 and 50 day moving averages are all still climbing.
Stock Market Outlook review of Apr 6 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but moving sideways.
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. At the close of trading the sell signal remained.
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 negative and sideways.
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 a neutral 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 extremely oversold and rising.
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 rising as well.
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 a down signal in place by the close of trading.
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 7 2017
For Friday there are a lot of factors investors have to overcome to push the stock markets higher. On Wednesday the Federal Reserve was explicit in their minutes, showing they plan to reduce their balance sheet this year and plan to limit bond buying programs. Many investors and analysts believe the Fed bond buying program was instrumental in keeping equity prices higher.
Then there is the March unemployment report for investors to digest. Finally there is also the news that US missiles attacked strategic Syrian facilities overnight. All of this will be weighing on investors on Friday. While the indicators are not all that bad and actually point to an upside for stocks, tonight’s events will probably mean lower for indexes on Friday. However the underlying direction remains unchanged at up even if Friday ends up lower for stocks.
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