Volumes were low on Monday as investors stayed on the sidelines with many on vacations and many watching the solar eclipse making Monday Aug 21 one of the slowest days of the year.
By the close of the day indexes were close to flat.
S&P Index Close
The S&P index ended up 2.82 to 2428.37.
Dow Jones Index Close
The Dow Jones ended up 29.24 points to 21,703.75.
NASDAQ Index Close
The NASDAQ closed down 3.40 points to 6,213.13.
Stock Market Outlook
Stock Market Outlook – Aug 21 2017
Chart Comments At The Close:
The S&P broke through 2425 again on Monday and moved lower reaching and then bouncing off the 100 day moving average. But on low volume the index couldn’t manage much of a push higher and what could have been a bounce turned out to be a flat close with only a slight gain on the day.
The closing candlestick on Monday was once again a signal of an impending bounce.
The Lower Bollinger Band continues to drop ending the recent Bollinger Bands Squeeze and the candlestick for today was once again outside the Lower Bollinger Band which is usually a bearish indicator.
The Upper Bollinger Band is turning up which is normally a signal that stocks will move higher shortly.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is strongly negative and still at the weakest levels of this year.
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 Aug 3. The sell signal gained more strength on Monday and the MACD histogram is showing selling pressure has reached levels last seen in March of this year.
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 negative and down at the levels from the August 10 sell-off.
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 strong sell signal in place and is oversold..
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 negative but trying to rise.
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 still negative and at levels where normally a bounce in valuations occurs.
Support Levels To Be Aware Of:
The market had developed light support at 2450 and good support at 2425. There is also light support at 2400, 2380, 2350 and 2300.
Normally we should see the market try to hold the 2425 on Monday.
Stock Market Outlook for Tomorrow – Tuesday Aug 22 2017
For Tuesday there are more signals that another bounce attempt is probably going to occur on Tuesday but it will still be highly suspect if it does indeed occur.
There are a lot of strong negative signal on the stock market at present.
Tuesday should see another attempt to bounce the market back higher, above the 100 day moving average. Any bounce though will remain suspect for Wednesday and Thursday.
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