On Monday Feb 13 2017 the rally from Friday continued. By the close all three indexes were at new all-time highs. Today’s advance by the S&P index marked the best 5 days of 2017 for advances by the index. For the first time in history the S&P ended the day valued at $20 trillion dollars.
S&P Index Close
The S&P index ended the day up 12.15 points to 2328.25
Dow Jones Index Close
The Dow Jones ended up 142.79 points to close at 20,412.16
NASDAQ Index Close
The NASDAQ closed up 29.83 points to end the day at 5763.96
Stock Market Outlook
Stock Market Outlook review of Feb 13 2017
Chart Comments At The Close:
On Monday the S&P closed above the Upper Bollinger Band which is bullish but also a signal of an overbought market. The closing candlestick is often a signal of weakness for the following day. The Bollinger Bands Squeeze that I had mentioned in the past is now over and the 50 day moving average has moved far above the Lower Bollinger Band which is falling steadily, another bullish signal.
All the 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 and rising.
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 10 2017. The buy signal was confirmed today.
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 and rising into overbought readings.
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 an up signal in place and is 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 and continues to rise, signaling higher prices lie ahead.
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. RSI is overbought and continuing to rise.
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 use for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochastic has an up signal in place and is overbought.
Support Levels To Be Aware Of:
The market has been trying to build support at the 2250 level. There is light support at 2195 but better support is at 2180 and then 2150.
Stock Market Outlook for Tomorrow – Tuesday Feb 14 2017
The technical indicators are now all positive. There are overbought signals from 4 of the 7 indicators. Of these, the Relative Strength Index (RSI) is perhaps the most important. Once the readings reach above 90 or 95 in the RSI indicator, we should be prepared for some dips in the S&P. Even on Tuesday we could see some dips in the morning as the market shows too many signs of being overbought.
Despite this, the outlook is still for a positive close on Tuesday.
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