With the market down to 2100 today all the indicators are oversold. This consistently negative move day after day is the worst since 2011 for the S&P and shows the concern of investors. Today the S&P broke through 2100 and closed just below it.
S&P Index Close
The S&P index closed down 13.78 points to 2,097.94 for a loss of 0.65%.
Dow Jones Index Close
The Dow Jones closed down 77.46 points to 17,959.64 leaving the Dow back below 18,000. This level has repeatedly been visited by the Dow all year and has yet to be left behind by the Dow Jones.
NASDAQ Index Close
The NASDAQ lost 48.01 points to close down 0.93% at 5,105.57.
Stock Market Outlook: SPX Chart Comments At End Of Day:
Stock Market Outlook Nov 2 2016
The S&P closed below the 200 day moving average and just below the 2100 level. This left a bearish candlestick for Thursday. With the index at the 200 day moving average there could be a bounce attempt yet again although I have waited two days for a bounce to occur but it is rare when a market falls through the 200 day and does not retest it, sometimes more than once.
The 20 day moving average is still below the 50 day moving average and falling quickly toward the 100 day. That would be a much stronger sell signal on the market if the 20 day moves below the 100 day. Note how the 50 day moving average is falling and now at the 2150 level.
The 100 day moving average is now falling although the 200 day continues to move higher.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels to be aware of.
2180 is resistance.
2150 is resistance.
2125 is resistance.
2100 is light support.
2090 is very light support.
2075 is also light support
Below that is 2050 which is light support.
2025 is better support than 2050.
2000 is primary support.
Weak support is at 1970 while stronger support is at 1956 and technically it is more important than 1970 for the market. 1940 is light support as is 1920. 1900 is more symbolic than any support.
Stock Market Outlook – Technical Indicators At The Close
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative and falling. At 97.84 momentum is entering oversold and reaching readings seen in the September sell-off.
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 Oct 28. The sell signal is gathering strength again on Wednesday.
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 is oversold.
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. Today’s reading of 10.72 is very oversold and often this deep a reading results in a bottoming and a rebound of some kind, even if only for a day or two.
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 very negative and oversold. A bounce should be in the works looks at the Ultimate Oscillator at the close.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is strongly negative and is oversold.
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 down signal in place and is also oversold.
Stock Market Outlook for Tomorrow – Nov 3 2016
All the technical indicators show the market as negative and oversold. Signs of a bounce are everywhere but investors have to be willing to jump in and heading into the election that may be difficult. We could move lower or sideways into the election. There is no strong support until 2000 but there is light support at various valuations including 2090 and 2075. The market might try to retake 2100 on Thursday but if that fails it will move to 2090 and then 2075. With the election just days away it is anyone’s guess but with the market extremely oversold and 2100 fairly good support, a bounce could occur. It will though not last and the market seems ready to slip below 2100 at some point either before or after retesting 2100 on Thursday.
A lot of companies reported disappointing revenue and/or earnings numbers on Wednesday after the close. That will most likely impact stocks on Thursday.
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