The Stock Market Outlook for Thursday was for more weakness and for stocks to move lower. All the indexes started the day on Thursday lower and then climbed for the rest of the day closing near their highs of the day.
S&P Index Close
The S&P opened at 2022.49 and spent the day climbing to finally close down just 0.77 points at 2035.94, regaining the important 2035 technical support level.
Dow Jones Index Close
The Dow Jones opened at 17,399.01 and climbed but turned positive, moving higher by 13.14 points. The Dow Jones closed at 17,515.73, regaining the important 17,500 support level.
NASDAQ Index Close
The NASDAQ opened down at 4,734.77 and climbed back to positive territory, moving higher by 4.64 points to close at 4,773.50.
Stock Market Outlook – Advance Decline Numbers
Volume was almost unchanged on Thursday at 3.41 billion shares traded. By the close what was a negative day for New York was turned positive as 56% of all volume was to the upside and 43% to the downside.
New lows rose to 20 but new highs continued to outpace new lows with 58 new highs.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook – Mar 24 2016
Stock Market Outlook: Chart Comments:
The S&P closed above the 200 day moving average again on Wednesday but fell away from the 2050 level to close at 2035 which is an important support point. The closing candlestick on Thursday is bullish for Monday.
The Upper Bollinger Band is turning lower and the Lower Bollinger Band is moving higher. These needs to be watched this week for signs of a possible Bollinger Bands Squeeze forming.
The 20 day simple moving average (SMA) is rising higher and is at the 200 day exponential moving average (EMA).
The 50 day simple moving average (SMA) is continuing to turn back up and the Lower Bollinger Band is now at the 50 day simple moving average (SMA).
The 200 day is still leading the market followed by the 100 day. While this remains bearish, the 100 day moving average is turning higher today.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels. These levels have not changed since January 2015.
2100 is resistance.
2075 was light support and is now resistance. Below that is 2050 which is resistance.
Light support is at 2035 with stronger support at 2000.
Weak support is at 1970 while stronger support is at 1956 and technically it is more important than 1970 for the market. 1940 is light support as is 1920. 1900 is more symbolic than anything else.
1870 is support. 1840 continues to be support. The 1820 level is light support. The strongest support level is at 1800.
1775 and 1750 are both critical support for the present bull market. While 1775 is important it is 1750 that is the bottom line.
A break of 1750 would mark a severe correction from the all-time high of 2134.72. This would be the biggest correction since the plunge in 2011 of a 20% pullback. A pullback to 1750 from the all-time high would be a drop of 384 points for a decline of 18%. A pull-back of that size would definitely stun investors and bring to question whether the bull market which started in 2009 is finished. From 1750 it is an easy slide to 1600 which was near the market top in 2007.
Stock Market Outlook Technical Signals
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and falling.
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 Feb 16 which now has a reading of just 1.59. It could issue a sell signal as early as Monday if there is a bit of weakness.
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, overbought and moving sideways.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive and moving sideways with a reading of 5.50. This is still a high reading but it signaling that prices are not changing which means stocks are 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 is signaling down for stocks and is overbought.
Fast Stochastic: For the Fast Stochastic I use the K period of 20 and D period of 5. These are not default settings but settings I set for the 1 to 3 month S&P 500 chart when it is set for daily. The Fast Stochastic is signaling down for stocks and is overbought.
Stock Market Outlook for Tomorrow – Monday Mar 28 2016
For Monday there are still 2 strong sell signals in place from the two stochastic indicators. MACD is quite weak and ready to issue a sell signal shortly. The Ultimate Oscillator, Rate Of Change and Momentum are all positive with a bit more weakness at the close on Thursday.
Weakness should still be expected for Monday but overall there are more signs of upside potential than downside for Monday. I am expecting a higher close unless oil should fall lower.
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