On Thursday Nov 9, concerns over the Tax Bill reforms and word that the estate tax might not be eliminated was enough to send stocks lower. As selling increased more investors jumped into the selling. Stocks recovered from their lows on comments from Senator John Cornyn which seemed to confirm that Senate Republicans were trying to avoid delaying the tax reform bill. By the close stocks were well off their lows but closed negative on the day.
S&P 500 Index Close
The S&P index ended down 9.76 to 2584.62
Dow Jones Index Close
The Dow Jones ended down 101.42 to 23,461.94
NASDAQ Index Close
The NASDAQ closed down 39.06 to 6750.05
Stock Market Outlook
Stock Market Outlook for Fri Nov 10 2017
Chart Comments At The Close:
On Thursday Nov 9 the S&P fell through the 21 day moving average and then rebounded after the lunch hour. It closed below the Upper Bollinger Band and above the 21 day moving average but it left behind a bearish candlestick.
The Bollinger Bands Squeeze is continuing. All major moving averages are still rising. The market fell to a low of 2566.33, still above the light support level of 2550.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but fell during the day.
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 Oct 24. The sell signal was almost gone on Wednesday but turned around and moved back lower 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 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 for Friday is negative and overbought.
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 fell dramatically and is pointing lower for Friday.
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:
There is support at the 2550 level which could assist in pushing the index higher in November.
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.
Stock Market Outlook for Tomorrow – Fri Nov 10 2017
On Thursday stocks opened the day lower and investors seized the downturn as a reason to unload and take some profits.
The market has been grinding higher in small gains. The drop today is not the start of a major move lower but was a catalyst that many investors have waited for, to take profits.
Technically not a lot of damage was done today. The drop below the 21 day moving average (Middle Bollinger Band) was recovered and the index closed above the 21 day.
A bounce could be in store for Friday but the closing candlestick is indicating more weakness is ahead for probably Friday or Monday.
Overall Thursday was an opportunity to setup new trades. I am expecting some sort of bounce attempt on Friday but a lower close.
It won’t take much in the way of a comment to send stocks back up.
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