Stock Market Outlook for Feb 11 2020 – Confirmed Up Signal

Monday saw stock indexes open lower and buyers immediately jump into stocks. The rally was borad-based and ended with all 3 major indexes at recorded highs.

Stock Market Outlook Chart Comments At The Close on Mon Feb 10 2020 

The SPX chart is back to bullish. The closing candlestick is bullish for Tue Feb 11 2020.

The index is continuing to pressure the Upper Bollinger Band to move higher which is bullish.

As well all the major moving averages are continuing to climb higher. There remains some evidence that a potential Bollinger Bands Squeeze might form shortly.

There are four support levels in place. These are light support at 3200, 3100 which is a full 100 points lower, 3075 which is light support and 3000 which is major support.

Stock Market Outlook review of Mon Feb 10 2020

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and rising.

• 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 Feb 7. The up signal was confirmed today.

• 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 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 an up signal in place for Tuesday and remains, 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 unchanged.

• 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:

3350 is resistance

3200 is light support

3100 is light support

3075 is light support

3030 is very light support

3000 is good support and if the S&P fell this low it would mark a normal correction in a bull market

2960 is light support

2900 is light support

2860 is light support

2840 is good support

2800 is strong support

 Stock Market Outlook for Tomorrow – Tue Feb 11 2020 

Dip buyers jumped into stocks Monday morning when the index opened lower. Investors continue to show they believe there is more upside ahead for equities.

With Moving Average Convergence / Divergence (MACD) issuing a confirmed up signal on Monday at the close, Tuesday should move higher.

Only the Rate Of Change shows no change is expected in pricing. The remaining indicators are all rising. Any dips on Tuesday remain buying opportunities.

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