On Monday the continued decline of General Electric Stock (GE) (down 6.3%) weighed heavy on the indexes. It was the worst day for GE stock in 6 years and was sparked by a large number of analysts downgrading the stock and expressing doubt the dividend can continue to be paid. With concerns not just with General Electric but other industrial stocks by many investors and analysts, the morning’s positive pop met with stiff resistance and investors decided to take profits after 6 days of the indexes rallying.
S&P 500 Index Close
The S&P index ended down 10.23 to 2564.98
Dow Jones Index Close
The Dow Jones ended down 54.67 to 23,273.96
NASDAQ Index Close
The NASDAQ closed down 42.23 to 6586.83
Stock Market Outlook
Stock Market Outlook review of Mon Oct 23 2017
Chart Comments At The Close:
The S&P on Monday ended down 10 points and the close saw the index at the lowest level of the day. This left behind a bearish candlestick. Often though this candlestick is followed by a one day bounce back or even a morning bounce before the index moves lower again.
All the major moving averages are continuing to move higher which is bullish.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive but lower.
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 almost gone and a sell signal appears to be just a day away.
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 is extremely overbought and has a sell signal in place for Tuesday.
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 and no longer overbought.
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 – Tue Oct 24 2017
Technically the S&P is still overbought but there are many signals indicating the market may move lower before moving back up.
Tuesday should see further weakness and probably a choppier day, although a morning pop in the index might be seen. The bias for Tuesday has shifted to lower and a negative close is anticipated.
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