What Happened On Thu Jan 25 2018
On Thursday comments from President Trump on the state of the US dollar, erased losses from earlier in the week for the dollar and the rise in dollar seemed to cut gains in the indexes. One of the best performing sectors was healthcare as Biogen jumped 2.09 percent after beating revenue and earnings estimates for their fourth quarter. Many of the stocks in healthcare moved higher in sympathy with Biogen.
Caterpillar stock had a wild day falling 3.5 percent on its earnings and then rallying back 2.8 percent and closing positive on the day. Ford posted lower than expected four quarter results and saw its stock fall almost 4%. After hours Starbucks fell along with Western Digital Stock (WDC) but Intel stock rose 2.45 percent on better earnings.
The Dow and S&P made new all-time highs on Thursday although they closed off those highs.
Closing Statistics for Thu Jan 25 2018
S&P 500 Index Close
The S&P index ended up 1.71 to 2839.25
Dow Jones Index Close
The Dow Jones ended up 140.67 to 26392.79
NASDAQ Index Close
The NASDAQ closed down 3.90 to 7411.16
Stock Market Outlook – Review of Thu Jan 25 2018
Chart Comments At The Close:
Thursday saw the S&P close pretty well flat on the day, marking the second day of the index moving inside and away from the Upper Bollinger Band. This left behind a neutral candlestick for Friday. All the major moving averages are still climbing.
Stock Market Outlook review of Thu Jan 25 2018
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and moving 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 buy signal on Jan 4. That buy signal lost some strength on Thursday.
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 positive and 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 is extremely overbought and 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 also extremely overbought and moving sideways.
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 sideways but continuing staying at its best readings since July 2016.
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 Jan 26 2018
The signals after the close are heavily weighted toward a sideways movement. There are not strong down signals in place except for the Slow Stochastic. The MACD buy signal lost strength today but it is still a very strong reading to the upside.
Overall we should see another volatile, choppy day of trading on Friday but there are signs that while still overbought, the market will move more sideways than either up or down dramatically.
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