What Happened On Wed Nov 15 2017:
Wednesday saw the S&P slip again. We saw almost the same pattern as Tuesday’s trading. The S&P sold off in the morning at the open or near the open and then rallied back. The close on the last 3 days has moved well above the intraday low. Today however the close, while still above the intraday low, was not nearly as high. This setup the pattern of lower lows and lower highs you can see in the 5 day chart.
Today’s drop took the S&P to within 7 points of the important 2550 barrier.
S&P 5 day to Nov 15 2017
Wed Nov 15 2017 Closing Statistics:
S&P 500 Index Close
The S&P index ended down 14.25 to 2564.62
Dow Jones Index Close
The Dow Jones ended down 138.19 to 23,271.28
NASDAQ Index Close
The NASDAQ closed down 31.66 to 6706.21
Stock Market Outlook – Review of Wed Nov 15 2017
Stock Market Outlook for Thu Nov 16 2017
Chart Comments At The Close:
On Wednesday the S&P closed below the 21 day moving average. During the day the morning drop almost reached the Lower Bollinger Band which is negative. The Bollinger Bands Squeeze is still continuing but there are new signs now that point to the squeeze ending with the S&P moving lower.
All major moving averages are still climbing but the close for the day showed a bearish candlestick for Thursday and probably a drop about to happen to the 2550 level.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is falling and 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 Oct 24. The sell signal gained strength 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 dipping 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 for Thursday is negative and lower.
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 falling an at a reading of 22.46 it won’t have much further to fall before we can expect a bounce attempt..
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 which indicates lower prices should be expected.
Support Levels To Be Aware Of:
There is support at the 2550 level which could assist in pushing the index higher in November.
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 Nov 16 2017
For Thu Nov 16 2017 signals to the downside have gained strength.
However with that strength also comes an oversold condition that should appear shortly. As well the index is falling to the Lower Bollinger Band and fell below the 21 day moving average.
Both of these are bearish signals that are often followed by a bounce attempt.
The remaining indicators are all turning lower. The only surprise is the Ultimate Oscillator which is lower, but only slightly which would suggest the downturn is not going to last very long.
For Thursday I am anticipating a lower close but we could see a bounce attempt on Thursday as well.
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