Thursday was dominated by a drop of 2% in oil prices, a rise in the dollar, a dive in the Euro and mixed investor outlook on earnings on Thursday. By the close the S&P and NASDAQ indexes were almost unchanged while the Dow fell slightly.
S&P Index Close
The S&P index closed down 2.95 points to 2141.34.
Dow Jones Index Close
The Dow Jones closed down 40.27 points to close at 18,162.35.
NASDAQ Index Close
The NASDAQ closed down 4.58 points to 5,241.83.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook for Oct 20 2016
Stock Market Outlook: Chart Comments:
On Thursday Oct 20 the S&P basically gave back the few points from Wednesday’s gain. The lackluster day of trading left a bearish candlestick for Friday. The index though did manage to hold above the 100 day moving average.
The 20 day moving average is still below the 50 day moving average and is falling closer to the 100 day moving average. If it falls below the 100 day moving average it will be strong sell signal. The 50 day moving average is also falling.
The 100 and 200 day moving averages are moving 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 it is still 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. The sell signal is quite a bit weaker again on Thursday. If the market were to move higher on Friday we could see a buy signal from MACD.
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 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 negative 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 but on Thursday you can see in the chart that this signal is turning down and could issue a sell signal on Friday, if the market falls lower.
Stock Market Outlook for Tomorrow – Oct 21 2016
Technically the market remains stuck sideways with little periods of small gains and small losses. At the close today the S&P is only 53 points away from setting a new high, so despite all the sideways action, the S&P is actually not doing badly.
But for Friday the technical indicators which were starting to show some strength to the upside are starting to weaken. Overall the strongest signal is still from the Slow Stochastic which continues to point higher for stocks. The Slow Stochastic looks out more than a single day. Because of this, it is continually advising that stocks will be higher shortly, but that has not been the case.
After hours on Thursdaym Microsoft had stellar quarterly numbers and that might help jump start the NASDAQ but there continues to be a list of issues holding stocks back, from oil’s whipsaws to Putin’s sending the Russian navy through the English Channel to fears that interest rates will rise in November or aDecember and choke off the little growth the economy is experiencing.
Friday looks set to continue to move sideways but the bias that was shifting higher has shifted back to weaker. Despite this there is still a chance on Friday for stocks to finish positive.
Overall the outlook is sideways with a bias lower but a chance for a positive close. A very mixed outlook indeed.
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