The market continued the rally that started late in the day on Tuesday, but at the 2160 level it lost steam.
Oil rebounded to its highest level since June after the fifth weekly decline in US crude inventories. Many analysts called for oil to grind its way higher from here, calling the recent lows, to be over. Activity in the US services sector reached an 11 month high in September which assisted in pushing financial stocks higher in anticipation of higher interest rates coming sooner than expected. High interest rates will help financial stocks and traders raised the odds of a Fed rate hike in December to 65%.
S&P Index Close
The S&P index closed up 9.24 points to 2,159.73.
Dow Jones Index Close
The Dow Jones closed up 112.58 points to 18,281.03.
NASDAQ Index Close
The NASDAQ closed up 26.36 points to 5m316.02.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook for Oct 5 2016
Stock Market Outlook: Chart Comments:
The S&P broke moved back above the 2160 level and left behind a bullish candlestick at the close of trading.
The 20 day moving average continues to fall away from the 50 day moving average which is bearish. The closing candlestick today touched the 20 day moving average but closed above it although still below the 50 day moving average.
The 100 and 200 day moving averages are still climbing and the Lower Bollinger Band that was moving lower is starting to turn back up.
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 is very light support.
2150 is 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 back negative but actually moving sideways for the past several days.
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 buy signal on Thursday Sep 22. That buy signal was very weak today.
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 but also 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 negative and moving 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 an up signal in place.
Stock Market Outlook for Tomorrow – Oct 6 2016
The question for Wednesday was whether the rally back to 2160 was just a bounce or the start of something bigger. For Thursday it still looks like weakness will hang around.
Technically the indicators are split with both stochastic indicators split and the three negative indicators that are really more sideways than simply negative and one positive MACD that is weakening daily.
Thursday is probably a toss up, but in general it looks weaker following today’s rally. I think the market could swing between positive and negative moves on Thursday but overall I think the bias from the technical indicators is for stocks to stay weak for another day.
Stay FullyInformed With Email Updates
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links
IWM ETF Russell 2000 Fund Info
Market Direction SPY ETF 500 Fund Info