Wednesday saw stocks make a small bounce back after Tuesday’s plunge in equities. Much of the rally though was caused by word that a consensus of sorts had been reached on the debt ceiling problem. Shortly after there was further talk about tax reform. This was enough to boost the markets mid-afternoon although markets closed off their highs.
S&P 500 Index Close
The S&P index ended up 7.69 to 2465.54
Dow Jones Index Close
The Dow Jones ended up 54.33 to 21,807.64
NASDAQ Index Close
The NASDAQ closed up 17.74 to 6393.31
Stock Market Outlook
Stock Market Outlook review of Wed Sep 6 2017
Chart Comments At The Close:
The S&P on Wednesday recovered about half of what was lost on Tuesday. That makes the rally suspect for a drop on Thursday. The index closed above both the 21 and 50 day moving averages. The closing candlestick is neutral on the outlook.
The 50 day and 21 day moving averages have now connected but the 50 day has not moved above, so no sell signal yet, which is bullish.
All the other major moving averages are climbing. The Upper Bollinger Band is falling which is bearish.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive continuing to fall.
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 continued 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 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 has a down 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 bounced on Wednesday.
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 negative and moving sideways indicate not much change in prices is expected.
Support Levels To Be Aware Of:
The market 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 Sep 7 2017
4 technical indicators are still positive and two are negative however the positive indicators are all falling back.
I had expected Wednesday for stocks to remain lower and then stage a rally on Thursday. That didn’t happen and word of stronger sanctions against North Korea circulating in the UN has the futures down for Thursday.
Overall though it looks more like a sideways day with a slight bias to the downside for Thursday.
Stay FullyInformed With Email Updates
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links
IWM ETF Russell 2000 Fund Info
Market Direction SPY ETF 500 Fund Info