Monday saw the markets open deep in the red but the morning lows didn’t break and the rest of the day was spent with the indexes climbing back. By the close of the day the S&P had a very small loss and the NASDAQ was positive.
S&P Index Close
The S&P index ended the day down 2.39 points to close at 2341.59.
Dow Jones Index Close
The Dow Jones ended down 45.74 points to close at 20,550.98.
NASDAQ Index Close
The NASDAQ closed up 11.64 points to end the day at 5,840.37.
Stock Market Outlook
Chart Comments At The Close:
On n Monday the S&P fell below the 50 day moving average before closing back above it. The drop to the 50 day moving average brought in buyers who pushed the index back to within an easy reach of the 2350 level. The Lower Bollinger Band is continuing to drop and the 21 day moving average is also falling. The Lower Bollinger Band appears ready to fall below the 50 day moving average which will be bearish, however if the Upper Bollinger Band stays trending higher or sideways, then the outlook will remain bullish.
The 200 and 100 day moving averages are continuing to climb. The closing candlestick on Monday was bearish.
Stock Market Outlook review of Mar 27 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative and still falling.
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 on Monday the sell signal stronger.
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 negative 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 has a up signal in place from being very oversold.
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 extremely oversold and has a strong negative reading of negative 1.09 . Readings this low are almost always followed by a bounce back.
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 low at $24.03 but can definitely fall lower before signaling an imminent 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 has a down signal in place and it too is oversold.
Support Levels To Be Aware Of:
The market has light support at the 2350, 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 28 2017
The climb of the market on Monday was fairly impressive and there should be enough strength from Monday, to push the indexes higher and positive on Tuesday.
The change of the Slow Stochastic to an up signal, usually looks out more than one day, so we could see the S&P climb for more than one day.
I would not expect a large move higher, but the outlook does appear to have changed from down to sideways with a slight bias up for Tuesday. That means dips on Tuesday are opportunities to setup additional trades.
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