Monday Mar 13 2017 was all about a sideways market sitting in limbo two days before the Federal Reserve chair, Janet Yellen makes her announcement on interest rates. Many investors spent the day doing very little and not wanting to commit to any trades, ahead of what is expected to be another interest rate increase, which should bring the interest rate to 1%.
Let’s look at the closings on Monday and then take a technical overview.
S&P Index Close
The S&P index ended the day flat at 0.87 points higher to close at 2373.47.
Dow Jones Index Close
The Dow Jones ended down 21.50 points to close at 20,881.48
NASDAQ Index Close
The NASDAQ closed up 14.06 points to end the day at 5,875.78
Stock Market Outlook
Chart Comments At The Close:
On Monday Mar 13 2017 the S&P continued to trade sideways but stayed just above the Middle Bollinger Band. The Middle Bollinger Band is continuing to climb and there are still some indications that the S&P might try to bounce off the Middle Bollinger Band to try to move higher. However there is also a Bollinger Bands Squeeze forming as the Lower Bollinger Band has crossed above the 50 day moving average which is normally bearish. The Upper Bollinger Band is falling lower to set up the index for the squeeze. The S&P is still holding above the 2350 level. All the remaining indexes are still climbing.
Stock Market Outlook review of Mar 13 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is moving sideways and remaining 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 Mar 7 2017. At the close of trading today the sell signal was still in play.
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 but also moving sideways with the market.
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 neutral signal at the close of trading which matches perfectly with the market stuck moving sideways.
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 falling slightly lower today but overall it is still more sideways than up or down.
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 Relative Strength Index (RSI) turned sideways today.
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.
Support Levels To Be Aware Of:
A bounce is possible off 2355 which is the 21 day moving average should the market fall that low.
The market has light support at the 2300 and the 2250 level. There is also light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook for Tomorrow – Tuesday Mar 14 2017
The technical indicators are a lot weaker to start off Tuesday. 5 of the 7 indicators are sideways just as the markets are. Basically a sideways signal from the technical indicators is a neutral signal. The two stochastic indicators are mixed with one neutral and the other pointing lower. MACD still has a sell signal in place.
For Tuesday the outlook remains basically sideways with a bit of weakness as the market heads into the Fed’s announcement on Wednesday.
Remember that sometimes the markets will move higher into the Fed rate decision. While we could see that happen toward the close of trading on Tuesday, if it will happen, it will probably be on Wednesday right after midday.
Right now though, Tuesday looks like a carbon copy of Monday with more weakness prevalent but keeping a sideways bias overall as investors stay waiting on the Federal Reserve announcement on interest rates.
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