Thu Dec 17 2020 saw new highs again in the indexes with the S&P touching 3725 intraday and ending at 3722.
Stock Market Outlook Chart Comments At The Close on Thu Dec 17 2020
Thursday saw the SPX above 3700 for a second day and making a new all-time high. The closing candlestick is bullish for Friday.
The Upper Bollinger Band is turning higher and the Lower Bollinger Band is turning lower. This is usually a bullish signal and a sign the Bollinger Bands Squeeze will end with the index pushing higher.
All the major moving averages are still rising which continues to suggest that new highs lie ahead for Friday and the start of next week.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising after being sideways for several days and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a a down signal on Dec 10. The down signal was weaker on Thursday and could turn positive by early next 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.
- 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. It is just starting to enter 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 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:
3700 is resistance
3600 is light support
3550 is support
3500 is support
3450 is support
3400 is support
3375 is support
3300 is support
3275 is support
3200 is support
3150 is support
3050 is support
3000 is support
Stock Market Outlook for Tomorrow – Fri Dec 18 2020
After setting a new all-time high indexes may experience some weakness in the morning on Friday. However all the technical indicators are shifting to signals that point to higher prices ahead.
For Friday the index should experience some dips which I will be using to enter some further trades. The close will be higher on Friday which will setup the S&P next week, for all new highs.