What Happened On Thu Nov 16 2017:
On Wednesday the S&P slipped in the morning to 2557. That seemed to be close enough to 2550 for most traders. They did some buying on Wednesday but today, Nov 16 2017 they were buying in larger numbers as the tax reform bill was being sent to and voted on in the House. Analysts and investors felt that the chance of any Tax Reform Bill even making it through the House this year was slight. This surprised analysts. As well, earnings from Walmart captured investors’ attention as most analysts jumpe don the growth of Walmart’s online sales as an indication they could be an Amazon competitor with enough strength to protect their retail operations and continue to grow them.
Looking at the 5 day chart you can see that into the morning and through to lunch hour, momentum was strongly positive. However as the afternoon progressed and the market rose higher, momentum drifted lower and by the close of the day it was neutral to negative. Basically the second half of the day saw momentum not support the rally higher in the S&P. The close saw the S&P back to the 2586 level which had been Monday’s high. Intraday the index reached 2590, just 7 points shy of the all-time record.
SPX Intraday Day 5 Day to Nov 16 2017
Closing Statistics for Thu Nov 16 2017:
S&P 500 Index Close
The S&P index ended up 21.02 to 2585.64
Dow Jones Index Close
The Dow Jones ended up 187.08 to 23,458.36
NASDAQ Index Close
The NASDAQ closed up 87.08 to 6793.29
Stock Market Outlook – Review of Thu Nov 16 2017
Stock Market Outlook for Fri Nov 17 2017
Chart Comments At The Close:
On Thursday the S&P had one of the best rallies since September and closed above the 21 day moving average.
The Bollinger Bands Squeeze is still continuing with no clear signals as to the direction stocks may move out of the squeeze.
All major moving averages are still climbing and the close for the day left a bullish candlestick.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is rising and slightly positive.
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 lost strength on Thu Nov 16 2017.
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 moving 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 Thursday is negative and lower.
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 rising after a bounce today.
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 rising sharply which indicates some further higher prices should be expected.
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 17 2017
For Fri Nov 17 2017 signals to the downside were weakened with today’s big rally. MACD and the Slow Stochastic both have down signals still in place but they are weaker.
All the other indicators are back positive and showing signs of climbing. The Ultimate Oscillator is the only troubling indicator as it remains uncommitted, moving sideways which indicates not a lot of change is expected.
A bounce had been anticipated for Thursday but that bounce could see a move lower on Friday. The bounce though was far stronger than expected and recovered all the losses from the past two days of selling. It has left the index basically where it was on Tuesday at the close.
There is definitely underlying strength but while we could see a bit more of a rise at the open, I would expect a pullback of some sort in the morning and then sideways action and a move back up. The close could still be negative on Friday or positive but it should not be a lot higher or lower than where the day ended on Thursday. The market outlook for Fri Nov 17 2017 is back to sideways with a slight bias up.
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