Thursday saw the indexes trying to regain some of the lost ground from Wednesday’s big collapse.
Many shell-shocked investors sat on the sidelines. Those who did venture in, sold in the mid-afternoon when the 10 year note yield fell below the 2 year, once again. Spooked investors sold quickly but with so many on the sidelines there was not enough volume to push the indexes much lower.
By the close not a lot had changed for the S&P. It closed up just 7 points. The NASDAQ was down 7 and Dow had the best day. It closed up 100 points.
Stock Market Outlook Chart Comments At The Close on Thu Aug 15 2019
The S&P looks poor after Thursday’s close. The index left behind a bearish candlestick sitting right at the 200 day moving average. Normally we should expect a bounce off the 200 day. Meanwhile the 21 day is ready to fall below the 50 day which would generate a strong sell signal for the overall market. The Lower Bollinger Band is falling further and pushing toward 2800. That’s also where I think the index may head next. The 50 day and 21 day moving averages are both turning down. Overall, the chart is bearish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is trying to rise but it is actually moving more sideways than up.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thursday July 18. The down signal was strong again on Thursday.
- Settings: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9.
Ultimate Oscillator: The Ultimate Oscillator signal is negative and falling.
- Settings: 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.
Slow Stochastic: The Slow Stochastic signal has a down signal in place.
- Settings: 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.
Relative Strength Index: The RSI signal is rising but only slightly. It is actually more sideways than rising.
- Settings: The relative strength index is set for a period of 5 which gives it 5 days of market movement to monitor. It is often the first indicator to show an overbought or oversold signal.
Rate of Change: The rate of change signal is also trying to rise and is very oversold.
- Settings: 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. With the Rate Of Change, prices are rising when signals are positive. Conversely, prices are falling when signals are negative. As an advance rises the Rate Of Change signal should also rise higher, otherwise the rally is suspect. A decline should see the Rate Of Change fall into negative signals. The more negative the signals the stronger the decline.
Support and Resistance Levels To Be Aware Of:
3000 is resistance
2960 is light resistance
2900 is light resistance
2860 is light support
2840 is support
2800 is strong support
2795 is light support
2745 to 2750 is light support
2725 is light support
2700 is light support
2675 is light support
2650 is support
2625 is light support
2600 is support.
Stock Market Outlook for Tomorrow – Fri Aug 16 2019
Thursday should see the indexes try for another bounce. The bounce on Thursday was poor and never had enough volume. On Friday we should see a better bounce attempt.
The bounce though won’t last. The index is sitting at the 200 day and all the indicators are weak. Most are pointing lower for the market.
Therefore while a second bounce is probably going to happen on Friday, it may fizzle on Friday and the indexes may close lower ahead of the weekend.
With a lot of investors not wanting to hold positions over the weekend, due to worry about what may happen on the weekend, the bounce won’t hold.