Another choppy day on Thursday. Markets swung in and out of negative and positive until by the close they were almost unchanged. Lots of talk out of Washington didn’t help investors. Looking at trading numbers it is obvious most investors don’t want to sell at these levels but without positive progress out of Washington, the technicals are slowly slipping.
It’s actually too bad considering that to date those S&P companies that have reported earnings are on average up 7.5% which is the best gain in 9 quarters.
Macy’s shares rose 5.2 percent on hope of a buyer for the struggling retailer. Facebook Stock fell 1.8 percent to close at $130.84 after hitting an intraday record of $135.49.
Tomorrow we get to see what happens to VISA, Amazon and Amgen stock, among others. They all released earnings on Thursday, after the close. Amazon disappointed, Amgen topped estimates and VISA showed payments volume growth up 47%.
S&P Index Close
The S&P index ended the day up 1.30 points to 2280.85
Dow Jones Index Close
The Dow Jones ended down 6.03 to close at 19,884.91
NASDAQ Index Close
The NASDAQ closed down 6.45 points to end the day at 5636.20
Stock Market Outlook
Stock Market Outlook review of Feb 2 2017
Chart Comments At The Close:
On Thursday the S&P fell to the 21 day moving average for the fourth time this week and once again bounced off the 21 day to close above it. The resulting candlestick is bullish for Friday. You can see that the Bollinger Bands Squeeze is starting to form. The Lower Bollinger Band has moved above the 50 day moving average which is bearish for the index. The 2260 level continues to hold up well and the S&P closed at the 2800 level.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is still positive and trying to rise slightly.
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 Jan 30 2017 which was confirmed yesterday.
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 back rising.
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.
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 falling.
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. It is rising slightly.
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 a down signal in place.
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 3 2017
The technical outlook is almost unchanged after the close on Thursday although some of the weaker positive indicators are trying to turn higher.
There are 3 sell signals on the S&P. There are 3 weak positive signals one of which is falling. The RSI is trying the rise.
This means there are more not slightly more bullish technical signals than bearish although the three sell signals are not good to see at this stage.
Facebook Stock didn’t help the NASDAQ out at all on Thursday. On Friday we could see Amazon punish the NASDAQ although it won’t be strange for investors to shrug off their disappointing quarter numbers and continue to buy Amazon. I also won’t be surprised to see Facebook stock jump tomorrow.
The outlook then is more sideways action but with a possible slight bias to the upside although those 3 sell signals from momentum are a bit worrisome. Overall I would expect a day similar to Wednesday and Thursday- Sideways.
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