Wednesday’s outlook was for a bounce attempt. The bounce wasn’t much as Fed minutes continues to suggest a rate increase in December might happen but wasn’t very clear on the likelihood of this happening. Overnight the odds of December seeing a rate increase fell from 70% to 66% according to CME’s Group’s FedWatch.
As well analysts are now pointing to the next quarterly results as being lower by possibly 0.7% which would mark the 5th straight quarter of declining profits.
Meanwhile crude prices pulled back but held above $50 and tensions continued to rise in the Middle East as Russia continued with its anti-America rhetoric amid allegations of hacking and more talk of war-crimes. All of this has pushed Thursday’s futures lower.
S&P Index Close
The S&P index closed up just 2.45 points to 2,139.18.
Dow Jones Index Close
The Dow Jones closed up 15.54 points to 18,144.20.
NASDAQ Index Close
The NASDAQ saw a small loss of 7.77 points to close at 5,239.02.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook -Oct 12 2016
Stock Market Outlook: Chart Comments:
The close today left another bearish candlestick for Thursday. As well the index closed at the Lower Bollinger Band and at the 100 day moving average today.
During the day the index fell below the 100 day moving average. The Bollinger Bands Squeeze is now starting
The 20 day moving average is still below the 50 day moving average but is back falling again. The 50 day moving average is also starting to turn down.
The 100 and 200 day moving averages are starting to turn sideways.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels.
The market was trying to build some support at the 2180 level. At present this is now resistance.
2160 was very light support.
2150 was support.
2125 is light support.
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 through to 2090.
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 anything else.
Stock Market Outlook Technical Signals
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative and falling.
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 11 2016. Today it confirmed that sell signal.
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 negative and falling.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive but again, sideways.
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.
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 set 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.
Stock Market Outlook for Tomorrow – Oct 13 2016
With 5 negative indicators and a confirmed sell signal from Moving Average Convergence / Divergence tool, the market is set to move lower. It should break through 2130 and head to 2120 during the day. Whether it breaks 2120, which was the September low is hard to judge.
All the signals from the index itself are turning negative as well. If the market decides to try another bounce attempt on Thursday, it will fail and the market will move lower based on the technical indicators tat the close of trading on Wednesday.
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