Stocks were having trouble from the outset despite a jump from Tesla following better than expected earnings and revenue.
Some of the high flyers pulled back including Apple Stock, Amazon and Alphabet and after hours a number of stocks moved lower following earnings including Avon Stock down 10.7%, Yum Brands down 2.3% and Dish Network down 4.5%.
Oil fell back despite a draw down in gasoline inventories. The afternoon also saw a report that Special Counsel Mueller had impaneled a Grand Jury for further investigation related to Donald Trump Jr.’s 2016 meeting with a Russian lawyer at Trump Tower. This probably means many more months of media coverage of the ongoing investigation into the extent of Russian involvement in the last Presidential election. It will be incredible if in the end nothing concrete comes out of this, except millions of tax dollars spent and hours of media coverage. Who knows what the final outcome may be, but so far the stock market has done a good job of ignoring much of the Washington “noise”.
S&P Index Close
The S&P index ended the day down 5.41 at 2472.16.
Dow Jones Index Close
The Dow Jones ended up 9.86 to 22,026.10 for another new closing high.
NASDAQ Index Close
The NASDAQ closed down 22.30 to 6340.34.
Stock Market Outlook
Stock Market Outlook review of Aug 3
Chart Comments At The Close:
The S&P pulled back on Thursday and is nearing the 21 day moving average. The drop on Thursday left behind a bearish candlestick for Friday.
All the major indexes are climbing higher but as you can see in the stock market chart, the index is drifting sideways.
Stock Market Outlook: Technical Indicators:
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative but with a reading of 99.95 it is pretty well 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 buy signal on July 14. Today MACD issued an unconfirmed sell signal and the histogram continued to weaken.
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 overbought and signaling lower for Friday.
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 but also falling.
Support Levels To Be Aware Of:
The market has developed 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 – Friday Aug 4 2017
For Friday the technical indicators are moving lower. We now have two sell signals and two negative readings. There are still two positive signals. Overall the outlook is weaker but most signals are pointing sideways for the movement with the bias being lower by the close of the day.
The non-farm payroll numbers are out on Friday but may not have as long an impact as usual. The market is anticipated decent numbers so I am not expecting much in the way of a bounce or a drop at the outset from the non-farm payroll numbers from July.
For Friday look for stocks to move sideways, dip, move higher, then pullback and finally end up lower. The S&P is sitting near all-time highs so a bit of weakness should be expected.
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