Monday saw all 3 indexes close at all-time highs. Oil surged 4.4 percent (Brent) and 3.9 percent for West Texas Intermediate. This is the highest level in 3 weeks caused by comments from Russian President Putin who indicated that he was expecting a deal on production levels to be reached next week. The dollar which has been on a tear, eased slightly against most currencies. Copper continued its advance, rising another 2.5 percent on Monday.
S&P Index Close
The S&P index gained 16.28 points to close at a record 2198.18 near the intraday high of 2198.70.
Dow Jones Index
The Dow Jones rose 88.76 points to a new closing high of 18,956.69 leaving it ready to move above 19000 for the first time in its history.
NASDAQ Index Close
The NASDAQ rose 47.35 points to a new all-time closing high of 5,368.86.
Stock Market Outlook – Chart Comments At The Close
Stock Market Outlook Review End of Day Nov 21 2016
The S&P ended the day well above 2190 and on the doorstep of the elusive 2200 valuation. The closing candlestick is a long green candlestick which points to the market closing at its high and is often followed by some selling the following morning.
The 20 day simple moving average (SMA) is continuing to advance toward the 50 day simple moving average (SMA). Once it crosses over it, this will be another buy signal. Meanwhile the S&P index which was starting to move sideways is not back pushing higher and the Upper Bollinger Band is also moving higher. This indicates there is more upside still to the rally.
However the Lower Bollinger Band is moving lower which also indicates that the rally is still not broad-based and many stocks are continuing to either pullback or move sideways and not advance. Normally the Lower Bollinger Band by now would be turning higher if the rally was broad enough.
Stock Market Outlook: Technical Indicators Comments At Close:
Stock Market Outlook Technical Indicators close of Nov 21 2016
Momentum: For momentum I use a 10 period when studying market direction. Momentum is still strong but it is starting to fall back.
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 but as you can see in the chart it is not 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. If there is selling on Tuesday and a lower close the Fast Stochastic will issue a sell signal.
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. On Monday it turned back up but the signals are now more sideways than higher. The market could dip at any time.
Technical Indicators review for Nov 21 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 and while it turned higher today, it is actually trending sideways.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive and again while it turned up today it is actually moving sideways and not higher.
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 Tuesday. It is extremely overbought and the signals are so close that any amount of selling on Tuesday will see the Slow Stochastic issue a sell signal.
Stock Market Outlook for Tomorrow – Nov 22 2016
Today’s rally was stronger than expected. The move above 2190 brought in additional buyers who helped to push the S&P to an new closing high on the doorstep of the 2200 level. This should bring in some selling on Tuesday but overall the outlook remains higher.
Tuesday then could see some weakness and some selling, but any dip will be quickly bought into and the S&P will move above 2200 either Tuesday or Wednesday.
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