Thursday was expected to be choppy with the bias primarily sideways but with stocks holding a bias lower. Everything from bond yields to financials falling, to a collapse of GE stock of 3.6% and Disney stock of 4.37% weighed on the stock markets. By the close, markets were flat with slight losses for the S&P and Dow and a slight gain for the NASDAQ. Underneath however, there was a lot of action in the markets themselves.
S&P 500 Index Close
The S&P index ended down 0.44 to 2465.10
Dow Jones Index Close
The Dow Jones ended down 22.86 to 21,784.78
NASDAQ Index Close
The NASDAQ closed up 4.56 to 6397.87
Stock Market Outlook
Stock Market Outlook review of Sep 7 2017
Chart Comments At The Close:
The S&P on Thursday closed above the 21 and 50 day moving averages for a fifth day. However today the 50 day moving average moved above the 21 day which is continuing to move lower. This is a market sell signal. It has been wrong a number of times this year as the market has dipped but then recovered, but it is important to understand that a major sell signal was generated. We will see how Friday and the next week unfolds.
The closing candlestick is bearish for Friday.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and back trying to climb.
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 Aug 31. The buy signal continued on Thursday with hardly any change from Wednesday.
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 still falling.
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 for Friday.
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 turned sideways which indicates no major price changes are expected.
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 negative and moving sideways indicating not much change in prices is expected.
Support Levels To Be Aware Of:
The market has light support at 2450 and good support at 2425. There is also light support at 2400, 2380, 2350 and 2300.
Stock Market Outlook for Tomorrow – Friday Sep 8 2017
There is not a lot of change after the S&P closed on Thursday. 4 technical indicators are still positive and two are negative however the positive indicators are continuing to weaken.
The Relative Strength Index (RSI) and the Rate Of Change indicators are both pointing sideways for prices rather up or down so we could see another weak day on Friday.
For Friday the technical indicators are still showing signals of weakness, sideways and a slight bias lower.
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