From the outset stocks moved lower as investors worried about North Korea. At the same time much of the blame for the decline could also be traced to Walt Disney Stock (DIS) which was down on poorer than expected earnings, Goldman Sachs Stock (GS) and Boeing Stock (BA) which were also lower, but the heaviest culprit was Disney down 3.88% by the close but during the day it plunged to $100.50 before closing at $102.83.
By the close however, all the indexes were well off the lows of the day.
S&P Index Close
The S&P index ended the day down just 0.90 points to 2474.02.
Dow Jones Index Close
The Dow Jones ended down 36.64 points to 22,048.70.
NASDAQ Index Close
The NASDAQ closed down 18.12 points to 6352.33.
Stock Market Outlook
Stock Market Outlook review of Aug 9 2017
Chart Comments At The Close:
The S&P pull back on Wednesday brought out lots of bears who discussed the pullback as if the S&P was down 5%. Instead as you can see in the chart, the S&P closed just below the 21 day exponential moving average (EMA) or the Middle Bollinger Band. Often we will see a bounce off that Middle Bollinger Band. The closing candlestick however was bearish.
All the major indexes are climbing higher but you can also see that the Bollinger Bands are starting to enter what might end up being another Bollinger Bands Squeeze.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative but with a reading of 99.85 it is pretty well neutral.
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 Aug 3. The sell signal is gaining strength and so is the MACD histogram which is the barchart just below the MACD signal lines.
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 still positive and actually moved up on the day.
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 was overbought and is still signaling lower for stocks.
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 falling.
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 trending sideways.
Support Levels To Be Aware Of:
The market has developed light support at 2450 and good support at 2425. There is also light support at 2400, 2380, 2350 and 2300.
Stock Market Outlook for Tomorrow – Thursday Aug 10 2017
For Thursday Aug 10 the technical indicators are continuing their move lower.
We now have two sell signals and two negative readings. There is one positive signal and one signal that is turning sideways.
Overall the outlook is still lower for the S&P but with the index sitting at the 21 day exponential moving average (EMA) we are probably going to see a bounce attempt on Thursday.
If the market ends lower on Thursday, watch for stocks to try to bounce higher on Friday.
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