Thursday Dec 12 saw the SPX jump on the news of a partial trade deal with China. While specifics were not known, the news still pushed investors to place capital into stocks, sending the index to its higher all-time level intraday and to its highest closing level.
Stock Market Outlook Chart Comments At The Close on Thu Dec 12 2019
The SPX chart continues to be bullish and the Bollinger Bands Squeeze looks ready to unwind with the index pushing higher against the Upper Bollinger Band.
The closing candlestick is bullish for Friday.
All the major moving averages are continuing to climb and the index which last week slipped below the 21 day, has been above the 21 day moving average for 6 straight days.
Light support is still at 3075.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Mon Dec 2 2019. Today the down signal was weaker again.
- 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 sideways.
- 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 back 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 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 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:
3150 is resistance
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 – Fri Dec 13 2019
There are no technical indicators pointing to growing weakness for Friday. Instead, all the indicators have been gaining strength and most are now pointing to a higher day again on Friday.
The Slow Stochastic shows the market as being overbought so there could be a dip or two in the morning. Overall the outlook remains higher. The index should move to 3200 by Monday.