Wednesday was all about the Fed July Minutes and the likelihood of an interest rate hike in September. While the media made a lot out of some of the hawkish comments, overall only two of the Fed officials actually thought there should be a rate hike in July. Even comments by New York Fed William Dudley who on Tuesday said a rate hike in September was possible, are being presented as hawkish when in fact a September rate hike has always been a possibility.
The morning prior to the release of the minutes saw the market drift lower and almost reach 2170 before rising back to 2175. The afternoon following the release of the July Fed Minutes, saw the market action turn choppy before eventually ending slightly higher.
S&P Index Close
The S&P index rose to 2182.22 up 4.07.
Dow Jones Index Close
The Dow rose 21.92 to close at 18,573.94.
NASDAQ Index Close
The NASDAQ rose just 1.55 points to close at 5,228.66.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook for Aug 17 2016
Stock Market Outlook: Chart Comments:
The SPX closed slightly almost unchanged on Wednesday. The closing candlestick was bullish for Thursday with the index closing above the 20 day simple moving average (SMA) and below the Upper Bollinger Band. The Bollinger Bands Squeeze continues and shows not sign of the S&P dropping.
All the major moving averages are continuing to climb.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels.
2160 is very light support.
2150 is 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 continues to move sideways but is staying positive.
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 is starting to gain a bit of strength again.
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 moving more sideways than up or down.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive and moving lower indicating that higher prices are not about to happen.
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 down signal in place and is somewhat overbought.
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 and is also a bit overbought.
Stock Market Outlook for Tomorrow – August 18 2016
The technical outlook for Thursday for stocks is now 3 negative and 3 positive. However the positive indicators are continuing to lose strength. While there is still much evidence pointing to a further advance for the S&P, the technical indicators are signaling that the advance is weakening.
For Thursday we could see a positive open and then a dip. The close could still be positive but overall the market is showing signs of stress. Thursday is important for the S&P. Stocks need to begin to advance with stronger technical support if they are to make and hold new highs.
Stay FullyInformed With Email Updates
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links
IWM ETF Russell 2000 Fund Info
Market Direction SPY ETF 500 Fund Info