It was an easy guess that Monday would see a huge rally. The market was deeply oversold as just about every investor knew and the FBI announcement of ending their investigation into Mrs. Clinton’s emails combined with polls showing she was still in the lead for the Presidency was enough to send stocks soaring on Monday.
With the big rally out-of-the-way and voting on Tuesday, where will the market move next?
S&P Index Close
The S&P index closed up 46.34 points for a 2.2% gain to close at 2131.52.
Dow Jones Index
The Dow Jones closed up 371.32 points for a 2.1% gain to close at 18,259.60
NASDAQ Index Close
The NASDAQ closed up 119.80 points to rally 2.4% to close at 5166.17.
Stock Market Outlook – Technical Indicators At The Close
SPX Nov 7 2016
Stock Market Outlook: Chart Comments:
The chart shows that the day ended with the S&P at the day’s highs. The index is still below the 100 day and 50 day moving averages but it did recover almost 70% of the losses from the past two weeks. This left a long bullish candlestick which often is followed by a down day. The 20 day simple moving average (SMA) is still below the 50 day and 100 day moving averages which is bearish but it is turning sideways and may turn back up if there is more upside action this week.
The 200 day moving average is no longer climbing, but that too could change if the market moves higher.
Stock Market Outlook: Technical Indicators
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative and rising rapidly.
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 lost strength on Monday.
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 issued an up signal by the close of trading today.
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 now pointing to the market as nearing overbought signals which often is followed by sideways movements and weakness.
Stock Market Outlook from Nov 7 2016 technical signals
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 jumped higher today and is now rising and to a neutral reading.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is still negative but climbing 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 by the close of trading on Monday.
Stock Market Outlook for Tomorrow – Nov 8 2016
With the election day now at hand, the market should try to build on Monday’s gains. However a rally as big as Monday’s is usually followed by a down day. If the market does move lower, it will be another opportunity for more trades in my opinion as the outlook remains higher into Wednesday, if Tuesday is sideways to negative by the close.
Overall expect Tuesday to be more sideways with a bias to the upside but dips should be anticipated.
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