Last week saw the lowest volume for the month of August and among the lowest for 2017. On Friday Fed Chair Janet Yellen said nothing about raising interest rates which sent the dollar lower and utility stocks higher along with many other dividend paying stocks while treasury yields fell. The week ended with positive gains with the S&P up 0.72%, the Dow Jones up 0.65% and the NASDAQ up 0.79%. This was the first up week in two weeks for the S&P and Dow and four weeks for the NASDAQ.
S&P Index Close
The S&P index ended up 4.08 to 2443.05.
Dow Jones Index Close
The Dow Jones ended down 30.27 to 21,813.67.
NASDAQ Index Close
The NASDAQ closed down 5.68 to 6265.64
Stock Market Outlook
Stock Market Outlook review of Aug 25 2017
Chart Comments At The Close:
The S&P on Friday tried to cross the 50 day moving average but failed. It is still below the 21 day and 50 day moving averages. The 21 day moving average is still falling. The closing candlestick is neutral on Monday so not a big change either way is expected. The Lower Bollinger Band has reached the 100 day moving average and the Upper Bollinger Band is turning lower. Most signs point to the market as moving lower shortly.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is neutral for Monday.
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 on Aug 3. The sell signal lost more strength on Friday.
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 to neutral 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 issued a sell signal on 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 is rising slightly.
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 still negative and indicating lower prices may lie ahead.
Support Levels To Be Aware Of:
The market had developed light support at 2450 and good support at 2425. There is also light support at 2400, 2380, 2350 and 2300.
Normally we should see the market try to hold the 2425 at the start of the week.
Stock Market Outlook for Tomorrow – Mon Aug 28 2017
Technically there are more weaker signals appearing once again including a new sell signal from the Slow Stochastic. Despite this the S&P is trending more sideways than up or down but it is having trouble holding the 2450 level and closed below it again on Friday.
Aside from markets there are other concerns investors are focused on including North Korea over the weekend, the destruction that is continuing with Hurricane Harvey, the lack of Fed comments on interest rates on Friday, low volumes and nothing positive on tax reform or repatriation of overseas profits.
There is still some strength in the market and it won’t take much to move it higher, especially if buyers return, but Monday Aug 28 looks poor for stocks. A rally might ensue in the morning but the close looks negative.
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