The rally stalled out on Wednesday a week since it began. Stocks around the world pulled back on Wednesday as the US dollar returned to its climb reaching the highest level against a basket of currencies since April 2003. Bonds continued to tumble as investors prepare for what they believe is a “done-deal” for the Fed raising interest rates in December, now just a month away.
The overall drop in the S&P and NASDAQ was small and the NASDAQ managed to stay positive thanks to increased buying interest in tech stocks including Apple which rose almost 2.69% to close just under $110 and Microsoft which rose 1.32% to $59.65.
Financial stocks as a sector returned about 1.4% today but are still up 9% as a group with some financials gaining even more. Overall the dip today felt more like profit-taking than the start of a pullback.
S&P Index Close
The S&P index lost just 3.45 points to close at 2,176.94, just below the important 2180 level but easily within striking distance.
Dow Jones Index
The Dow Jones moved lower, falling 54.92 for a loss of 0.29% to close at 18,868.14.
NASDAQ Index Close
The NASDAQ climbed higher today ending positive with a gain of 18.96 points to close at 5,294.58.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook: Chart Comments:
The S&P traded in a fairly tight range today following yesterday’s jump higher. While the S&P was unable to move above 2180 today, it still managed a respectable close just a few points below and easily able to overtake the resistance level.
The 20 day moving average is still climbing higher above the 100 day moving average and moving toward the 50 day moving average. A cross upa and above the 50 day moving average will signal a strong buy for the index.
The closing candlestick on Wednesday was neutral with an indecisive outlook either up or down for Thursday.
Stock Market Outlook from Nov 16 2016
Stock Market Outlook: Technical Indicators
Momentum: For momentum I use a 10 period when studying market direction. Momentum is now at its highest level since July 11. Today it continued to climb despite the market weakness throughout the day on Wednesday.
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 buy signal on Nov 9. The buy signal remains strong and is rising.
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 still signaling up and shows the market as extremely overbought.
Relative Strength Index (RSI) : For the Relative Strength Index (RSI) I use a period of 5 which is a week of activity and is often quite accurate. The RSI is still pointing to the market as extremely overbought which is often followed by a pullback.
Stock Market Outlook – Technical signals from Nov 16 2016
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 still showing the market as overbought.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is still positive but pulled back a little with today’s weakness.
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 an up signal in place again for Thursday. It is extremely overbought.
Stock Market Outlook technical indicators from Nov 16 2016
Stock Market Outlook for Tomorrow – Nov 17 2016
The market continues to try not to fall despite being extremely overbought. Today’s pullback saw some buying pressure at times, which helped to keep the pullback slight.
Of the 7 technical indicators, all are positive or signaling up, but all are also overbought.
We could see some weakness on Thursday again, as the overbought condition remains with most stocks at the present time. Nonetheless, until there are more signs to the downside, the outlook remains weak, overbought but with a bias still up. Therefore any pullback on Thursday or even Friday are opportunities for more trades, according to the Stock Market Outlook technical indicators.
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