With earnings still at the forefront, investors in general are not enthused with many of the numbers. That is continuing to weigh on the markets and is keeping the market in a choppy narrow trading range. Today is was Apple, Edwards Lifesciences and Bayer AG’s turn to send the market lower. Tomorrow perhaps TESLA can help the market regain its footing.
S&P Index Close
The S&P index closed down just 3.73 points to 2139.43 after being down half a percent earlier in the afternoon.
Dow Jones Index Close
The Dow Jones closed up 30.20 points to 18,199.47.
NASDAQ Index Close
The NASDAQ added to Tuesday’s loss with a drop of 33.13 points or 0.63%. It closed at 5250.27 the lowest level in 2 weeks.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook for Oct 26 2016
Stock Market Outlook: Chart Comments:
A new chart format is now being used as my past provider has moved to a new platform.
The close today left another bearish candlestick for Thursday but many times a candlestick such as the one at today’s close will mark a reversal so watch for stocks to try to regain some headway. Today the SPX closed at the 100 day moving average after breaking it through it earlier in the day.
If you look at the chart you can see that the Bollinger Bands are turning lower, the 20 day and 50 day moving average are turning lower and now the 100 day is starting to turn lower. The 200 day moving average however is not but it is moving sideways.
Much of this may have to do with the election and there is always the possibility that after the election the market will pick up steam. Whether it happens or not is anyone’s guess.
In general the pattern above is bearish more than it is bullish.
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 neutral at the close but over the past few weeks it has been more sideways than either 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. On October 24 it issued an unconfirmed buy signal when it turned positive. It remains unconfirmed.
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 positive but falling. Overall though it too is trending sideways.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is negative still but overall it continues to move sideways.
Slow Stochastic: The slow stochastic is not being used at present while my provider tries to work out the kinks from their new system.
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 still in place but as you can see it is turning sideways and could issue a sell signal if the market moves lower tomorrow.
Stock Market Outlook for Tomorrow – Oct 27 2016
For Thursday the technical indicators are primarily still moving sideways which is a rather neutral stand on where the market is heading. There is weakness everywhere within the market but there has been weakness for 3 months and the markets still have stayed near their most recent highs.
For Thursday I would expect a possible pop at the open thanks to Tesla’s earnings at the close on Wednesday but we could see selling and a return to the sideways market. Investors remain very reluctant to sell out of the market and instead are selling positions in a number of individual stocks. This is almost similar to sector rotation which is common throughout the trading year. This is keeping a lid on any strong advance.
Thursday looks like it will repeat the prebious patterns. It may end the day higher, but overall there is no catalyst to push the market a lot higher and Thursday looks no different – sideways with a bias lower.
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