Thursday saw another new 52 week high early in the day followed by sellers who continually pushed back at each spike higher intraday. The close was again particularly disappointing as investors and most likely programmed trading sold stocks into the close sending the S&P lower by 14 points. For the week the S&P is up 53 points, primarily from Monday’s big rally. Since Monday stocks have trended sideways. The S&P closed at 4778.
The NASDAQ also had a weak day ending lower by 24 points to 15,741. For the week though the index is up 88 points, all from Monday’s rally.
L:et’s review Thursday’s close to see what is in-store for the final trading day of 2021.
Stock Market Outlook Chart Comments At The Close on Thu Dec 30 2021
The closing candlestick on Thursday is bearish for Friday. The Upper Bollinger Band is rising but the Lower Bollinger Band which was falling is starting to turn higher. At present this is still bullish but if the Lower Bollinger Band keeps rising, it will become bearish.
Meanwhile the 21 day moving average is climbing above the 50 day which is bullish.
The 50, 100 and 200 day moving averages are still climbing, all of which is bullish.
For Fri Dec 31 2021 the chart is bullish except for the candlestick which points to a potential down day for Friday.
Stock Market Outlook review of Thu Dec 30 2021
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 Thursday Dec 23. On Thursday the up signal was quite strong.
- 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 falling.
- 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 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 falling.
- 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:
4800 is resistance
4725 is resistance
4700 is resistance
4670 is support
4655 is light support.
4600 is good support
4550 is light support
4525 is light support
4500 is support
Stock Market Outlook for Tomorrow – Fri Dec 31 2021
Historically the final trading day of December has been negative for the stock indexes. At present the technical indicators are pointing to a probable down day on Friday.
The technical indicators are primarily turning bearish although the Moving Average Convergence / Divergence indicator is still strongly positive. But it is almost alone in its outlook for more upside in the S&P. Instead the other indicators are pointing to a lower day to end 2021.
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