Stock Market Outlook for Dec 19 2019 – Higher

Wednesday Dec 18 saw another day of the S&P in a very tight trading range between primarily 3196 and 3194. The close saw the index slip a point to close at 3191. This is the third day of the index trying to punch through to 3200.

Stock Market Outlook Chart Comments At The Close on Wed Dec 18 2019 

The SPX chart continues to be bullish. The closing candlestick on Wednesday is bearish for Thursday but often this is not a strong signal.

The Upper Bollinger Band is still rising and the Lower Bollinger Band is falling and could cross below the 50 day this week which can be a bearish signal.

All the major moving averages are still climbing and there are three support levels in place. 3100 and 3075 are both light support. 3100 is better support which is 6% below where the index closed on Wednesday.

Stock Market Outlook review of Wed Dec 18 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling and positive.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Friday Dec 13. On Wed Dec 18, the up signal was stronger.

• 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 signal is falling although it is actually more sideways than up or down at present.

• 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 is overbought and has an up signal in place.

• 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 falling and signaling 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 moving sideways indicating little change in pricing 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:

3200 is resistance

3100 is light support

3075 is light support

3030 is light support

3000 is support

2960 is light support

2950 was light support

2900 is light support

2860 is light support

2840 is support

2800 is strong support

2795 is light support

2745 to 2750 is light support

2725 is light support

2700 is light support

 Stock Market Outlook for Tomorrow – Thu Dec 19 2019 

Signals on Wednesday after the close are more mixed with a number of signals losing strength and dipping lower and other moving sideways. However MACD and the Slow Stochastic still have up signals in place.

The closing candlestick on Wednesday was bearish for Thursday but often that signal can be wrong.

Overall the index looks still prepared to push higher on Thursday. With earnings from Micron Technology better than expected we could see the index push higher as stocks like NVIDIA Stock (NVDA), United Technologies Stock (UTX), Advanced Micro Devices Stock (AMD) and Intel Stock (INTC) may react positive to the earnings results.

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