What Happened On Mon Nov 27 2017
On Mon Nov 27 2017 a weak start to the day was expected. Part of the weakness was the S&P above 2600, as explained in the outlook for Monday. Other factors on Monday included a 1.9% drop in crude prices. Technology stocks particularly Micron Technology Stock (MU) which was down 3.3% and NVIDIA down 1.3%. Other tech stocks lower included Western Digital Stock (WDC) which fell 6.7% and Seagate Stock (STX) down 3%. Retailers were a bit better, particularly Amazon which reported robust sales for the Black Friday-Cyber Monday weekend. The stock rose above $1200 to a new high of $1213.41 before closing up $9.83 to $1195.83. Walmart Stock and Target Stock were both flat with Macy’s stock up just 14 cents to $21.21.
By the close the Dow Jones had a slight rise, the NASDAQ a slight fall and the S&P ended flat but above 2600.
Closing Statistics for Mon Nov 27 2017
S&P 500 Index Close
The S&P index ended down 1.00 to 2601.42
Dow Jones Index Close
The Dow Jones ended up 22.79 to 23,580.78
NASDAQ Index Close
The NASDAQ closed down 10.64 to 6878.52
Stock Market Outlook – Review of Mon Nov 27 2017
Stock Market Outlook review of Mon Nov 27 2017
Chart Comments At The Close:
On Friday the S&P closed above 2600 for the second time but the close was unconvincing with the index under selling pressure all day and closing flat on the day with a loss of 1 point. The inability of the S&P to move left behind a bearish candlestick for Tuesday.
The index is above the 21 day moving average which is bullish but you can see that the Bollinger Bands Squeeze is starting to tighten. We should get a signal shortly either up or down.
The original outlook for the Bollinger Bands Squeeze ending was for the S&P to move higher. That remains the outlook but there are some signs that the market is in limbo, waiting to see if a tax reform bill of some kind is passed.
All major moving averages are still climbing.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but unchanged.
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 almost gone on Monday by the close but there was no buy signal which I had anticipated. If the market moves higher on Tuesday we should get a buy signal.
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 positive and still trending 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 continues to point higher and is signaling that the market is becoming overbought. The signal readings appear to point to the possibility of a down signal shortly. This needs to be watched.
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 no longer rising but is unchanged pointing to no change expected for Tuesday.
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 it too is pointing sideways with no expected change.
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 – Tue Nov 28 2017
For Tuesday the technical indicators are pointing to a sideways day for the markets. There is some weakness again showing itself in the market but even the little dips on Monday were traded and bought into by investors. There was no sign of an impending pullback. Instead the market looks almost in limbo, awaiting any progress on the tax reform bill as well as the Senate confirmation hearings of Jerome Powell to replace Janet Yellen as the new Federal Reserve Chair.
I had expected weakness on Monday but a positive close. The market came close to meeting that goal. On Tuesday the technical indicators are advising we may have another repeat day. I would expect some weakness again but a chance for a positive close is still there.
A final reminder that it’s Last Call for the sale on Memberships!
The sale ends tonight at midnight EST and will not be extended.
For investors who have emailed wondering how to add more than one year at the Black Friday special prices, go to the RENEW page through this link and select whatever additional time period you would like added to your account. The additional time is added to your account to extend your membership. Your can see the time added to your membership through your profile which shows up in the right hand column under the “FullyInformed Member Login” heading.
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