What Happened On Thu Feb 1 2018
One of the biggest problems facing stocks is rising bond yields which have many investors and analysts spooked. Concerns over rising inflation which would mean rising interest rates kept a lid on the rally attempt on Thursday. The Dow Jones jumped at the open and was well above 100 points higher but the other two indexes couldn’t seem to get going. By the close the Dow was up just 37 points while both the S&P and NASDAQ saw another day of slight losses.
Closing Statistics for Thu Feb 1 2018
S&P 500 Index Close
The S&P index ended down 1.83 to 2821.98
Dow Jones Index Close
The Dow Jones ended up 37.32 to 26186.71
NASDAQ Index Close
The NASDAQ closed down 25.62 to 7385.86
Stock Market Outlook – Review of Thu Feb 1 2018
Chart Comments At The Close:
Thursday saw further declines in the S&P and losses of both an early morning and then early afternoon rallies. The closing candlestick is bearish but it also often signals another bounce attempt. All the major moving averages are climbing but the S&P is now just above the 21 day moving average and the Lower Bollinger Band is turning hi9gher and could cross above the 50 day moving average which would be bearish for the rally.
Stock Market Outlook review of Thu Feb 1 2018
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and has fallen back a long way. On Thursday it turned sideways.
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 Jan 31. On Feb 1 the sell signal was strongly confirmed.
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 but turning sideways.
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 lower.
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 – Fri Feb 2 2018
For Friday the market looks set to open lower and then try for another rebound attempt. Signals though are still advising that any bounce is just a bounce and there is more weakness still ahead. Therefore while a bounce attempt is once again likely, it is highly suspect.
The non-farm payroll numbers from January may impact the market as well on Friday but overall they are not yet the story. It is concern over rising bond yields and inflationary worries that has the market in trouble.
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