What Happened On Wed Jan 24 2018
For the first time in weeks we got an actual volatile day that saw the indexes separate and move in differing directions. The VIX moved jumped to $12.19 during the afternoon and closed up 3.3% to $11.47 keeping the VIX elevated since the jump on Jan 16.
The day saw all 3 indexes make new all-time highs but only the Dow remained positive at the end of trading.
Closing Statistics for Wed Jan 24 2018
S&P 500 Index Close
The S&P index ended down 1.59 to 2837.54
Dow Jones Index Close
The Dow Jones ended up 41.31 to 26252.12
NASDAQ Index Close
The NASDAQ closed down 45.23 to 7415.06
Stock Market Outlook – Review of Wed Jan 24 2018
Chart Comments At The Close:
Wednesday saw the S&P close below the Upper Bollinger Band leaving behind a bearish candlestick for Thursday. The drop was not much but it left behind a negative outlook for the following day. All the major moving averages are still climbing.
Stock Market Outlook review of Wed Jan 24 2018
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and moving sideways.
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 Jan 4. That buy signal gained more strength on Wednesday. It is now at the best readings in more than 3 years.
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 positive and falling.
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 is extremely overbought and has a down signal in place.
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 also extremely overbought and falling.
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 and falling but continuing staying at its best readings since July 2016.
Support Levels To Be Aware Of:
2675 and 2620 are light support.
There is good support at the 2550 level.
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 but would represent a full correction as a drop to this level would be almost 15%.
Stock Market Outlook for Tomorrow – Thu Jan 25 2018
The signals this evening are still very strong and point to further upside still ahead. However for Thursday they are showing that weakness is developing which could last for some of the day on Thursday or even all the day.
We could see a bounce at the start but we should be prepared for weakness mid-morning as well as early afternoon. There is still a good chance for a positive close but some investors are wanting to take some profits off the table and we could see that happen on Thursday ahead of Friday when options expire. Expect at least the same amount of volatility as we saw on Wednesday.
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