What Happened On Wed Jan 31 2018
Healthcare continued their decline joined by a number of big names like Wynn, Intel, United Therapeutics, Harley-Davidson, Tyson Foods and many more. But there were also many stocks gaining and that helped the indexes keep the sellers contained. By the close all three indexes were positive, but for the S&P and NASDAQ, only slightly.
Closing Statistics for Wed Jan 31 2018
S&P 500 Index Close
The S&P index ended up 1.38 to 2823.81
Dow Jones Index Close
The Dow Jones ended up 72.50 to 26,149.39
NASDAQ Index Close
The NASDAQ closed up 9.00 to 7411.48
Stock Market Outlook – Review of Wed Jan 31 2018
Chart Comments At The Close:
Wednesday saw the S&P turn sideways and the action left behind a bearish candlestick for Thursday although often we see a bounce off such a candlestick before more selling. All the major indexes are climbing but the Upper Bollinger Band is turning down and the Lower Bollinger Band is turning up as the index works its way into a Bollinger Bands Squeeze which often signals a change in trend.
Stock Market Outlook review of Wed Jan 31 2018
Stock Market Outlook: Technical Indicators:
All the signals turned lower and lost more strength on Wednesday.
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and falling.
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 Jan 4. Today, Jan 31 MACD issued an unconfirmed sell signal of some strength. We need another day to confirm the signal.
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 signal is negative and falling.
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.
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 moving lower.
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 moving sideways.
Support Levels To Be Aware Of:
2675 and 2620 are light support.
There is good support at the 2550 level.
The S&P has light support at 2480. It also has light support at 2450 and good support at 2425. Below that there is some support at 2400, 2380, 2350. 2300 has the most support at present but would represent a full correction as a drop to this level would be almost 15%.
Stock Market Outlook for Tomorrow – Thu Feb 1 2018
For Thursday we should see the S&P try to stage a better rebound but there is a lot of weakness and we have a new sell signal from MACD to contend with. Overall markets look weak but often that’s when they are ready to bounce back. Thursday could be volatile with many big names reporting earnings and others reporting after the close. Friday we also get the unemployment numbers. Fed comments today definitely point to more interest rates likely in 2018 and that could in the end be what slows the bull market, perhaps this summer or into the fall. Treasury yields continue to rise which will also weigh on stocks if yields get too high too fast. All of this needs to be watched going forward, but for now the outlook is for a second bounce attempt and another try to close higher on Thursday for the S&P.
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