What Happened On Wed Dec 13 2017
Wednesday saw markets climb ahead of the Federal Reserve’s decision on interest rates. Shortly before noon the S&P made a new intraday high of 2671.88. The S&P then slipped slightly lower ahead of the 2:00 PM announcement. After the announcement of a quarter point increase the S&P moved higher and almost reached the late morning all-time high by 3:00 PM. Sellers took charge in the last hour and sent the S&P back lower to close down 1.26 points or basically flat by the end of the day. The Dow made another new all-time high.
Closing Statistics for Wed Dec 13 2017
S&P 500 Index Close
The S&P index ended down 1.26 to 2662.85
Dow Jones Index Close
The Dow Jones ended up 80.63 to 24,585.43
NASDAQ Index Close
The NASDAQ closed up 13.48 to 6875.80
Stock Market Outlook – Review of Wed Dec 13 2017
Chart Comments At The Close:
On Wednesday the S&P was almost unchanged by the end of the day after setting a new all-time high just before the noon hour. This left behind a “weak-up” candlestick for Thursday. Often this type of candlestick is followed by very small gains or losses.
The S&P candlestick closed below the Upper Bollinger Band but did not reach the Upper Bollinger Band as it did on Tuesday. Again this is often a sign of weakness building or an overbought condition. If you look at the technical indicators below you can see that the S&P is indeed, overbought.
All the major moving averages are continuing to climb which is bullish.
Stock Market Outlook review of Wed Dec 13 2017
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but unchanged from Tuesday which is normally a sign of weakness to come.
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 Nov 28. The up signal was slightly weaker on Wednesday.
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 signal is positivebut slightly lower.
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 for Wednesday and shows the S&P as overbought.
Relative Strength Index: The relative strength index is set for a period of 5 which gives it 5 days of market movement to monitor. It often is the first indicator to show an overbought or oversold signal. The RSI signal is overbought and dipped slightly.
Rate of Change: Rate Of Change is set for a 21 period. This indicator looks back 21 days and compares price action from the past to the present. The rate of change signal is positive but also dipped slightly.
Support Levels To Be Aware Of:
The 2600 is building some light support.
There is good support at the 2550 level which could assist in keeping the index up for December.
The S&P has light support at 2480. It also has light support at 2450 and good support at 2425. Below that there is some support at 2400, 2380, 2350. 2300 has the most support at present.
Stock Market Outlook for Tomorrow – Thu Dec 14 2017
For Thursday the S&P is showing signs of being overbought. The closing candlestick on Wednesday often signals a poor day to follow.
Overall the technical indicators are still showing there is strength in the S&P and investor conviction for higher prices, but a weak day should be anticipated in which the market could move slightly higher or lower as investors digest the interest rate increase and the comments from outgoing Fed Chair, Janet Yellen on Wednesday.
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