What Happened On Tue Nov 14 2017:
Tuesday saw further weakness in the markets including an early morning plunge of 168 points in the Dow Jones. The indexes were hurt by a third day of weakness in oil prices as analysts who were bullish just days before, turned bearish, citing a global decline in commodity prices and rising production by US producers. Add in continuing concerns over what the tax reform bill may finally look like and we saw stocks move lower on Tuesday.
Looking at the 5 day intraday chart of the S&P below you can see the index fell from the 2595 level to break below 2570 today before recovering to close just below 2580. None of these are support levels of any size. Instead the first support level is down at 2550 which is just 30 points lower. A move that low should spark a rally of some sport, should it happen. On Tuesday the index was unable to hold above the 2580 level or retake it.
SPX 5 Day Intraday Chart
Tue Nov 14 2017 Closing Statistics:
S&P 500 Index Close
The S&P index ended down 5.97 to 2578.87
Dow Jones Index Close
The Dow Jones ended down 30.23 to 23,409.47
NASDAQ Index Close
The NASDAQ closed down 19.72 to 6737.87
Stock Market Outlook – Review of Tue Nov 14 2017
Stock Market Outlook for Wed Nov 15 2017
Chart Comments At The Close:
On Tuesday the closing saw the S&P pop back to just above the 21 day moving average. During the day it clipped below it which is bearish. This is the second break of the 21 day moving average in 4 trading days. Normally we will see more breaks now that this has occurred twice.
The Bollinger Bands Squeeze is continuing. All major moving averages are still rising.
The closing candlestick was bearish for Wednesday.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is falling and is almost 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 gained strength on Tuesday.
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 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 for Wednesday 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.
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 signaling that lower prices are ahead.
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 – Wed Nov 15 2017
For Wed Nov 15 2017 there are further signals that the market may move lower still.
MACD and the Slow Stochastic are both negative with sell signals. These sell signals are gain strength.
All the other indicators are falling except for the Ultimate Oscillator which is pointing sideways.
The outlook for Wednesday then is for stock market indexes to try to rally but fail and the indexes should end the day lower.
Following the action in the markets on Tuesday, the outlook has shifted to slightly lower.
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