Thursday saw another choppy day but the S&P managed a new closing high marking a fourth straight day of closing above 3900.
The NASDAQ managed to close back above 14,000 for a second time this week.
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Stock Market Outlook Chart Comments At The Close on Thu Feb 11 2021
The S&P closed higher by just a handful of points which left behind a bearish candlestick for Friday. Weekly Initial Unemployment Insurance Claims were not encouraging on Thursday which could weigh more heavily on stocks on Friday. Disney Stock however beat all expectations and returned to profitability and that should help stocks on Friday.
The Upper Bollinger Band is continuing to rise while the Lower Bollinger Band is falling lower. This is bullish for further advances in the index.
The 21 day moving average is rising and is above the 3800 valuation. The 200, 100 and 50 day moving averages are still climbing with the 100 day moving average now above the 3600 valuation and the important 200 day moving average at 3450. These are strong indicators the market will continue to push to new highs.
Stock Market Outlook review of Thu Feb 11 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling but 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 Fri Feb 5 2021. On Thursday the up signal was still valid.
- 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 turning lower.
- 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 for Friday and is very 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 moving sideways.
- 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 moving sideways.
- 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:
3900 is resistance
3850 is support
3800 is support. The 21 day moving average is just above 3800 at present.
3750 is support and where the 50 day moving average is at present.
3700 is light support
3600 is strong support and where the 100 day moving average is at present
3550 is support
3500 is strong support
3450 is support and where the 200 day moving average is at present. A drop this low would represent an 11% correction.
Stock Market Outlook for Tomorrow – Fri Feb 12 2021
The index is struggling to break free of 3900 and may pullback to build stronger support for another push.
The technical indicators are weaker and a number are turned sideways with momentum turning back lower.
The index may open lower and then try a rebound but for a Friday ahead of the long weekend, many investors may take profits and the day will end lower.
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