For Thursday the outlook was for stocks to fall back to the 2125 or 2120 level which was the low in the September sell-off. The S&P did fall back and reached 2114.72 before recovering and moving back up. The sell-off continued on Thursday thanks in large part to economic news out of China that showed exports fell 10 percent in September, the worst in 7 months. As well concerns continued on the timing of interest rate increases along with the rise in the US dollar. While the sell-off was underway, oil prices turned around and moved back above $50 a barrel. This seemed to stop the selling and the market recovered its footing and moved higher.
S&P Index Close
The S&P index closed down just 6.63 points by the close to 2,132.55.
Dow Jones Index Close
The Dow Jones closed down 45.26 points to 18,098.94
NASDAQ Index Close
The NASDAQ fell 25.69 points to 5,213.33.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook – Sep 13 2016
Stock Market Outlook: Chart Comments:
For Thursday the index fell through the 100 day moving average and almost reached the 200 day moving average. The recovery in the midday and afternoon left behind what is commonly seen as a reversal candlestick which could be a signal that the market will try to rebound higher on Friday.
The index closed at the Lower Bollinger Band and below the 50, 20 and 100 day moving averages. 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.
The drop in the morning moved lower than the drop in early September.
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 more sideways than up or down.
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 the sell signal gathered further strength.
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 moving sideways.
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 14 2016
With 6 negative technical indicators again at the close on Thursday the market seems set to move lower. However there are some signals, including the closing candlestick today, that point to the resumption of a rebound rally on Friday.
We could see a move higher in the morning and then more weakness as the day progresses but don’t be surprised if there is a rally that fails on Friday. The close still looks negative for Friday or sideways at best. Buying protection is definitely warranted especially on spikes higher, as the S&P today broke to its lowest level since July 8. The market still seems intent on falling to 2100.
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