On Thursday stocks finally dipped as the overbought condition of the stock markets weighed on investors. The dollar also dipped but oil rose slightly. The indexes traded in the red for most of the day but the close saw investors back buying, pushing all the indexes off their lows and almost ending the day flat from Wednesday’s close. The Dow Jones ended with a new record closing high as it squeaked out a positive close in the last few minutes of trading.
S&P Index Close
The S&P index ended the day down just 2.03 points to close at 2347.22
Dow Jones Index Close
The Dow Jones ended up 7.91 points to close at 20,619.77 for another record high close
NASDAQ Index Close
The NASDAQ closed down 4.54 points to end the day at 5,814.90
Stock Market Outlook
Stock Market Outlook review of Feb 16 2017
Chart Comments At The Close:
On Thursday the S&P closed at the Upper Bollinger Band but left behind a bearish candlestick for Friday. The Lower Bollinger Band is still falling lower and the Upper Bollinger Band is pushing higher. The 21 day moving average is still turned up and the 3 major moving averages, 50, 100 and 200 day, are all continuing to advance.
A move back to inside the Upper Bollinger Band by the S&P should be expected at any time.
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 to neutral 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 dipped slightly.
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 dipping.
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 – Friday Feb 17 2017
The technical indicators on Thursday Feb 16 2017 ended the day showing still showing signs of being extremely overbought. Three technical indicators, the Slow Stochastic, Fast Stochastic and Relative Strength Index (RSI) are extremely overbought but the Relative Strength Index (RSI) is turning lower so we could see more weakness on Friday.
Watch for more weakness on Friday in the morning especially. We might open with a bounce attempt and then a dip but the close still looks like it should be positive, even if only slightly.
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