Thursday saw weakness again in stocks but once again, the dip buyers jumped in when the S&P fell below 2160 and pushed the index back up. While Friday’s market direction will be all about the August non-farm payroll numbers, let’s take a technical look at the market’s close today and a possible outlook for Friday Sept 2.
S&P Index Close
The S&P index lost 0.09 points to close virtually unchanged at 2,170.86.
Dow Jones Index Close
The Dow Jones gained 18.42 points to close at 18,419.30.
NASDAQ Index Close
The NASDAQ gained 13.99 points to close at 5,227.21.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook for Sep 1 2016
Stock Market Outlook: Chart Comments:
The SPX closed below the 20 day simple moving average again on Thursday and just above the Lower Bollinger Band. During the day the index broke through the Lower Bollinger Band once again although it closed back above it. The push back above it left a bullish reversal candlestick for Friday. However the Bollinger Band Squeeze continued tightening again today and is still showing signs of sending the index lower.
All the major moving averages are continuing to climb although the 200 day moving average is starting to turn sideways as the market continues to move sideways.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels.
The market is 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 negative.
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 August 1. That sell signal was active and almost unchanged on Thursday.
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 and rising.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is neutral to positive.
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 Stochasticis has a down signal in place.
Stock Market Outlook for Tomorrow – Sep 2 2016
The market direction on Friday will be almost entirely dominated by the non-farm payroll numbers for August. However the technical indicators will have a role to play in Friday’s action and more importantly in Monday’s market movement.
At present the indicators are 4 to 2 negative. Two of the negative indicators have strong sell signals in place. As well, despite the rally back again today from the morning drop, momentum is falling.
If Friday closes positive, watch for Tuesday to be negative or at the least, sideways as the technical indicators are still pointing to the S&P as wanting to move lower to find support. My guess is the index will reach 2150 before a serious bounce occurs. That though is just a guess and not based on technical indicators. Right now the indicators still show that as long as the S&P holds the 2170 level, the market will come out of the weakness to the upside and again today, the market moved back to close at 2170.
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