On Tuesday Feb 14 2017, Valentine’s Day, all 3major indexes closed at new record highs once again.
The anticipated weakness for the morning did occur, and then following testimony of Fed Chair Janet Yellen, stocks regained their footing and continued to press higher into the close.
S&P Index Close
The S&P index ended the day up 9.33 points to 2337.58
Dow Jones Index Close
The Dow Jones ended up 92.25 points to close at 20,504.41
NASDAQ Index Close
The NASDAQ closed up 18.62 points to end the day at 5782.57
Stock Market Outlook
Stock Market Outlook review of Feb 14 2017
Chart Comments At The Close:
On Tuesday the S&P closed above the Upper Bollinger Band for the third day, which is bullish but also a signal of an overbought market. The closing candlestick signaled weakness for Wednesday. The Lower Bollinger Band is quickly falling lower and the Upper Bollinger Band is pushing higher. The 21 day moving average has clearly turned up and the 3 major moving averages, 50, 100 and 200 day, are all continuing to advance.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and rising.
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 Feb 10 2017. The buy signal continued to gain strength.
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 rising. It is overbought.
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 an up signal in place and is very overbought.
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 continues to rise, signaling higher prices lie ahead.
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. RSI is extremely overbought and continuing to rise.
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 an up signal in place and is also very overbought.
Support Levels To Be Aware Of:
The market has been trying to build support at the 2250 level. There is light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook for Tomorrow – Wednesday Feb 15 2017
The technical indicators on Tuesday Feb 14 2017 ended the day showing signs of overbought pressure. Three technical indicators, the Slow Stochastic, Fast Stochastic and Relative Strength Index (RSI) are extremely overbought and it is rare to see the Relative Strength Index (RSI) move much higher without a dip to release the overbought tension.
Wednesday should see further weakness such as was evident Tuesday morning. I would anticipate the weakness to appear by mid-morning however the close still looks higher for all three indexes.
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