On Wed Oct 18 2017, the Dow Jones held most investors attention as a rally by IBM Stock helped propel the index to above 23,000. However both the S&P and NASDAQ were flat for a second day.
S&P 500 Index Close
The S&P index ended up 1.90 to 2561.26
Dow Jones Index Close
The Dow Jones ended up 160.16 to 23,157.60
NASDAQ Index Close
The NASDAQ closed up 0.56 to 6624.22
Stock Market Outlook
Stock Market Outlook review of Wed Oct 18 2017
Chart Comments At The Close:
On Wednesday the S&P continued with a slow climb higher. The lack of strength left behind another bearish candlestick for Thursday. Overall though there were only a few changes in the technical indicators.
All the major moving averages and the 21 day moving average are moving higher which is bullish. The Upper Bollinger Band is also moving higher, again bullish for the market.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but on Wednesday it was almost unchanged from Tuesday which could signal a bounce coming.
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 Aug 31. The buy signal is still eroding and is now almost at the point of a sell signal. Often though, in a rally this kind of weakness is being watched by traders who will use the slight weakness to suddenly jump into some stocks that have shown weakness. This then jumps the S&P. We could see this happen on Thursday or Friday.
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, no longer overbought and moved lower on Wednesday. Overall though you can see that it is 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 is extremely overbought. It is wavering between up and down signals. For Wednesday there is another up signal but overall the Slow Stochastic is signaling sideways for Thursday.
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 showing the market is still overbought and it is trending sideways but keeping a bias up. Prices should move higher.
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 trending sideways which indicates prices are not expected to change much.
Support Levels To Be Aware Of:
The S&P has light support at 2480. It has light support at 2450 and good support at 2425. There is also light support at 2400, 2380, 2350 and 2300.
Stock Market Outlook for Tomorrow – Thu Oct 19 2017
You can see there is not a lot of change again in the technical indicators. There is weakness still within the rally but overall the signals are pointing to a sideways momentum with a bias still to the upside. We could see a negative close on Thursday but we could just as easily see another positive close. The market is waiting for another catalyst to move the broader market higher. So far the better earnings is keeping the market from falling but it is not providing enough strength to move higher, so the market remains stuck sideways.
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