Stock Market Outlook for Fri Apr 16 2021 – Early Morning Dip Likely But Higher Close

Stock Market Outlook - Early Morning Dip But Higher CloseOn Thursday the S&P and Dow made new historic highs once again.

The NASDAQ closed back above 14,000 and is within 136 points of the all-time high.

Let’s review Thursday’s close to see what it can tell us about Friday.

Stock Market Outlook Chart Comments At The Close on Thu Apr 15 2021 

The Upper Bollinger Band is continuing to rise which is bullish. The index on Thursday closed just below the Upper Bollinger Band. This is the eighth overbought signal from the SPX chart and shows an extremely overbought index.

The Lower Bollinger Band is falling and could move below the 100 day which is bullish, on Friday.

The closing candlestick on Thursday is bullish for Friday..

The 21 day moving average is climbing higher away further away from the 50 day moving average which is bullish.

The 50, 100 and 200 day moving averages are all climbing higher.

Overall the S&P chart is very bullish and signaling overbought for an eighth straight day.

Stock Market Outlook review of Thu Apr 15 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and rising again.

  • 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 March 29 2021. On Thursday the up signal gained some strength but is still weaker than earlier in the week.

  • 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 still signaling 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 showing the index as 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 and 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 also rising.

  • 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:

4150 is light support

4100 is light support

4070 is very light support

4050 is light support

4000 is Support

3900 is support and the 50 day is just above this at 3933.

3850 is support

3800 is support and the 100 day is just above this level.

3750 is good support

3700 is light support

3680 is light support

3600 is strong support and the 200 day is just above this level.

 Stock Market Outlook for Tomorrow – Fri Apr 16 2021 

The index is still extremely overbought.

The rally on Thursday turned some of the technical indicators back to rising but a couple are still suggestion caution including the Slow Stochastic that seemed unimpressed with Thursday’s rally and is still signaling down.

The closing candlestick is often seen before a lower start to the next day. For that reason watch for weakness to start the day on Friday and then another push to above 4170. It will be a choppy day but the index should end slightly positive on the day.

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