Yesterday the dollar fell lower on comments from President-elect Trump. Today the dollar moved higher pushing oil and gold prices lower. Meanwhile comments from Fed Chair Janet Yellen on a gradual lifting of interest rates helped boost many stocks within the financial sector which in turn helped the S&P inch higher into the close of trading today.
S&P Index Close
The S&P index ended the day up 4 points to close at 2271.89, back above the 2270 level.
Dow Jones Index Close
The Dow Jones ended lower by 22.05 to close at 19,804.72, almost 200 points below the “magic” 20,000 goal.
NASDAQ Index Close
The NASDAQ closed up 16.93 to 5,555.65.
Stock Market Outlook
Chart Comments At The Close:
The Bollinger Bands Squeeze is continuing without much in the way of signs to advise whether the squeeze will end with stocks moving higher or lower. For now the trend is still sideways. The tight trading range is plain enough as the market is staying within the 2260 to 2270 levels. Dips are continuing to be bought into.
A break of this tight 10 point trading range is expected this week and I am expecting the move to be up.
The S&P closed the day just above the 21 day moving average but as it has done for 4 of the last 5 trading days, it reached the 21 day and bounced off it during the day.
All the main moving averages are continuing to climb.
Support Levels To Be Aware Of:
Light support is at the 2250 level. There is also light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook: Technical Indicators:
With the S&P trading within such a tight range , there is little change in the technical indicators on Wednesday.
Momentum: For momentum I use a 10 period when studying market direction. Momentum is still positive and back to 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 sell signal Dec 23 2016. The sell signal remains steady.
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 rising.
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 still signaling down to neutral.
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 trying to bounce.
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. It is back positive and trying to bounce.
Fast Stochastic: For the Fast Stochastic I use the K period of 20 and D period of 5. These are not default settings, but settings I use for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochastic is signaling down to neutral.
Stock Market Outlook for Tomorrow – Thursday Jan 19 2017
For Thursday Jan 19 2017 there is little change in the outlook. The technical indicators are tiled more toward weakness than strengt6h but the underlying signal from the market remains up for stocks. There are 4 indicators that are negative and 3 that are positive.
For Thursday we are back to “same old, same old” with weakness anticipated but the chance of a slight positive close or slight negative one almost equally balanced at probably 50/50.
Caution is still advisable but overall there are no strong signals to assist in knowing whether the next move in up or down for Thursday. In general it is still sideways with a bias to the upside.
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