Wednesday saw the expected bounce. All three indexes moved higher. The NASDAQ closed again above 11,000. The S&P neared a new all-time high, reaching 3387 intraday and closing just 7 points lower at 3380.
Stock Market Outlook Chart Comments At The Close on Wed Aug 12 2020
The Upper Bollinger Band moved higher on Wednesday and the closing candlestick ended the day bullish for Thursday.
There are now 6 up signals and one down signal when the Lower Bollinger Band moving above the 100 day moving average back on July 27. At present the Lower Bollinger Band turned up slightly which you can see in the chart. If it moves above the 50 day moving average, it will signal a potential move lower for the index.
The 21, 50, 100 and 200 day moving averages and continuing to climb. The SPX chart is far more bullish than bearish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is trending sideways.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday Aug 3. On Tuesday the signal was back climbing.
- Settings: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9.
Ultimate Oscillator: The Ultimate Oscillator is rising and slightly overbought.
- Settings: 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.
Slow Stochastic: The Slow Stochastic has a down signal in place and is still extremely overbought.
Settings: 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.
Relative Strength Index: The RSI signal is rising.
- Settings: The relative strength index is set for a period of 5 which gives it 5 days of market movement to monitor. It is often the first indicator to show an overbought or oversold signal.
Rate of Change: The rate of change signal is sideways indicating no large change in prices is expected.
- Settings: 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. With the Rate Of Change, prices are rising when signals are positive. Conversely, prices are falling when signals are negative. As an advance rises the Rate Of Change signal should also rise higher, otherwise the rally is suspect. A decline should see the Rate Of Change fall into negative signals. The more negative the signals the stronger the decline.
Support and Resistance Levels To Be Aware Of:
3375 is resistance
3300 is resistance
3275 is support
3200 is support
3150 is support
3050 is support
3000 is support
2975 is light support
2950 is light support
2900 is light support
2860 is light support
2840 is light support
2800 is good support
2725 is light support
2700 is light support and marked a drop of 20.4%.
2500 was good support and marked a correction of 26.3%
2191 was the market low on March 23
Stock Market Outlook for Tomorrow – Thu Aug 13 2020
For Thu Aug 13 2020 the technical indicators are mixed with two trending sideways, one signaling lower and three signaling higher. The mixed outlook could see some weakness to start the day on Thursday.
Following some morning weakness, expect to see the index climb higher and the S&P should make a new high. The close though could be flat to slightly higher.