Tuesday’s marked moved higher thanks to better than expected earnings from Caterpillar and 3M. Wednesday’s market sold lower thanks to disappointment over Boeing earnings, Verizon, AT&T, Advanced Micro Devices, Chipotle Mexican Grill Stock and others. By the close every sector was lower. Bond yields rose as investors felt that tax reform was moving ahead and would probably mean higher interest rates. This too helped to sink stocks.
S&P 500 Index Close
The S&P index ended down 11.98 to 2,557.15
Dow Jones Index Close
The Dow Jones ended down 112.30 to 23,329.46
NASDAQ Index Close
The NASDAQ closed down 34.54 to 6563.89
Stock Market Outlook
Stock Market Outlook review of Wed Oct 25 2017
Chart Comments At The Close:
The S&P on Monday fell to the 21 day moving average intraday and then bounced back closing well off the 21 day and off the lows of the day.
The Upper Bollinger Band is falling and the Lower Bollinger Band is rising, often a signal that a Bollinger Bands Squeeze may be starting to form.
All the major moving averages are rising. The closing candlestick is bearish but is often first followed by a bounce.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is neutral.
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 was confirmed today.
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, but moving 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 a sell signal in place 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 lower.
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 26 2017
Technically the S&P is no longer overbought. The market received a confirmed down signal from the MACD indicator today by the close. Often this signal will take more than a day to take effect.
After the weakness on Wednesday normally we will see a bounce and then a retest of the lows of the drop on Wednesday.
For Thursday I am anticipating a bounce back that will fail. Stocks could end the day positive but if they do, we should see some further selling on Friday. I am anticipating stocks will end the day negative.
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