Tuesday saw stocks get some strength from Netflix’s quarterly earnings results. Their impressive revenue and subscriber growth, a further jump in the price of oil and a decline in the US dollar all came together to help push stocks higher.
S&P Index Close
The S&P index closed up 13.10 points to 2139.60. The index was higher during the day but in the last hour of trading investors sold stocks lower.
Dow Jones Index Close
The Dow Jones closed up 75.54 points to close at 18,161.94.
NASDAQ Index Close
The NASDAQ rose 44.01 points to close at 5,243.84.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook – Oct 18 2016
Stock Market Outlook: Chart Comments:
On Tuesday the S&P rose above 2140 for much of the day and then dipped back into the close. This left a candlestick that is often seen as a reversal. Normally the reversal would be a move up based on the shape of the candlestick, but at times it can be a move lower. One big advantage for the bulls was the index closed just above the 100 day moving average after closing below it yesterday and on Thursday last week. Both Thursday and Monday set up a bearish pattern for the market outlook. All the remaining technical aspects have not changes.
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.
There was a possible Bollinger Bands Squeeze starting to form but that looks like it will not occur now.
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 while it did move higher, it is actually moving sideways. Momentum has been negative daily since Oct 5 except for one day.
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 is about the same as the last few days. There has been no growth in strength for the 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 while it did rise, it too is moving more sideways than up or down.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is slightly positive but again more sideways than up or down.
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.
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 an up signal in place.
Stock Market Outlook for Tomorrow – Oct 19 2016
The technical indicators may be changing. Tuesday’s close saw two up signals from the stochastic indicators which would indicator a move up on Wednesday from the Fast Stochastic and a move up Thursday and/or Friday from the Slow Stochastic. Meanwhile the closing candlestick is often a reversal which could also signal a move higher.
The outlook for Wednesday Oct 19 then is for stocks to continue their advance from Tuesday although a plunge in oil or a strong move up in the dollar will end any advance on Wednesday.
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