Wednesday was certainly an interesting day. Stocks moved higher at the open on news of an OPEC deal on production cuts as well as the GDP number which showed improvement from the most recent quarter. The “good news” though didn’t seem to last long enough for investors. By mid-morning the early morning all-time highs had been lost and stocks were under selling pressure. The close saw the markets give back all the day’s gains.
S&P Index Close
The S&P index ended the day down 5.85 to close below 2200 at 2198.81.
Dow Jones Index
The Dow Jones ended the day with a 1.98 rise to close at 19,123.58.
NASDAQ Index Close
The NASDAQ fell 56.24 points for the worst showing of the three indexes. It closed down 1.05% to 5,323.68.
Stock Market Outlook
Chart Comments At The Close:
Stock Market Outlook End of Day Review Nov 30 2016
The S&P ended Wednesday just below 2200. The bigger disappointment though was a spike in the morning that set all-time new highs, was lost to sellers. Normally that kind of action signals some further selling lies ahead. The closing candlestick however was bearish but is also often a reversal which would indicate that the selling of the past few days could be about to end.
All the major moving averages are continuing to advance.
Stock Market Outlook: Technical Indicators
SPX Technical Review for Nov 30 2016
Momentum: For momentum I use a 10 period when studying market direction. Momentum has falling and while it is still positive, the drop in the strength of momentum is clear when you look at the chart above. The rally momentum is definitely disappearing.
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 buy signal on Nov 9. The buy signal remains strong but you can see that the MACD histogram is showing that the buy signal is weakening. This confirms what we see in momentum.
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 is still signaling down and shows the market as extremely overbought.
Relative Strength Index (RSI) : For the Relative Strength Index (RSI) I use a period of 5 which is a week of activity and is often quite accurate. The RSI has pulled back further and is nearing a neutral stance.
SPX Technical Review Nov 30 2016
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 falling lower and shortly will turn negative.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive and is continuing to rise although today it dipped slightly.
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 shows the market as overbought. Since this looks out more than a day, it is predicting that the index will be lower in the next few days.
Stock Market Outlook for Tomorrow – Dec 1 2016
Historically, the first day of December the S&P has been up 6 of the last 9 years. The NASDAQ has been up 19 of the last 28 years. Tomorrow though might be different. I am expecting the market to remain weak and move more sideways than clearly up or down ahead of Friday’s unemployment numbers which are released Friday morning at 8:30 AM. The technical indicators are warning that weakness is growing and unless the market can hold the 2195 line on the S&P, stocks are going to fall lower. Thursday should see stocks stay primarily sideways. Friday though is all about the jobs numbers.
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