Friday saw Another strong move by the indexes with the Sep closing above 3500 for the first time. The NASDAQ is now up an incredible 30% for 2020.
Stock Market Outlook Chart Comments At The Close on Fri Aug 28 2020
On Friday the closing candlestick is bullish for Monday following a close above 3500 and a move to above the Upper Bollinger Band.
The Lower Bollinger Band is still at the 50 day but the 50 day is back rising. This remains bullish.
There are still 6 up signals and one down signal caused when the Lower Bollinger Band moving above the 100 day moving average back on July 27.
The 21, 50, 100 and 200 day moving averages are continuing to climb. The SPX chart is still bullish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an signal on Monday Aug 24. That signal was stronger at the close of trading on Friday.
- 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.
- 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 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 and extremely overbought.
- 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 rising indicating a change in prices should be expected on Monday.
- 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:
3500 is resistance
3450 is resistance
3400 is support
3375 is support
3300 is support
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
Stock Market Outlook for Tomorrow – Mon Aug 31 2020
Monday promises to be higher as Apple begins trading following a stock split of 4 for 1 and Tesla is trading 5 to 1. Both are big cap stocks and will jump higher. I will be buying shares of Apple Stock at the open on Monday and adding to it on any dips. Almost always a stock split on an uptrending stock is bullish. Add in news that the FDA is planning to fast track covid19 vaccines before phase three trials end and the market is positioned to move higher on Monday.
A couple of things to mention involving resistance in the SPX. While the index closed above 3500, the 3450 and 3500 remain resistance levels at present. In September we could easily see a dip back to both those levels early in the month. Once the S&P closes several times still higher above 3500, the 3450 level will become support but not until then.
With the indexes poised for a move higher to end the final trading day, August 2020 marks the best August since 1984. An amazing feat.