Monday opened negative amid confusion and turmoil over the Trump Administration immigration policies. With investors nervous, they sold out of positions and moved their cash to the sidelines.
The market dipped heavily twice during the day but both times the S&P fell only slightly below 2270.
By the close of the day much of the drop had been recovered and the S&P closed at 2280.90, back above the important 2275 level and within 20 points of 2300.
S&P Index Close
The S&P index ended the day down 13.79 points to 2280.90
Dow Jones Index Close
The Dow Jones ended down 122.65 to close at 19,971.13
NASDAQ Index Close
The NASDAQ closed down 47.07 points to end the day at 5613.71
Stock Market Outlook
Stock Market Outlook review of Jan 30 2017
Chart Comments At The Close:
On Monday the selling pushed the S&P index down to the Middle Bollinger Band which is a 21 day moving average. This resulted in a bounce back off the lows and a close above the Middle Bollinger Band. The closing candlestick is bearish for Tuesday. All the other major moving averages are continuing to rise. The higher lows pattern remains in effect and the Sep sis till moving above the 21 day moving average which are both signals that the uptrend remains intact.
Support Levels To Be Aware Of:
The market has been trying to build support at the 2250 level. There is light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook: Technical Indicators:
Stock Market Outlook Technical review for Jan 30 2017
Momentum: For momentum I use a 10 period when studying market direction. Momentum is still positive but moving lower following Monday’s sell-off.
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. An unconfirmed sell signal was generated today, Jan 30 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 is positive and signaling that the market is overbought.
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 and is overbought.
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.
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 moving lower, falling from being overbought.
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 has a down signal in place and is overbought.
Stock Market Outlook for Tomorrow – Tuesday Jan 31 2017
The sell-off has turned 3 indicators negative all of them momentum based. These are MACD, the Fast Stochastic and the Slow Stochastic.
The other 4 remaining technical indicators are falling back and showing signs of being able to fall further.
With much turmoil in the markets, Tuesday should see a bit of a bounce attempt. But unless something positive occurs for the immigration issue, Tuesday looks set to give back any bounce and move lower.
At present though the selling is just temporary while the underlying direction remains still higher.
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