Stock Market Outlook for Fri Feb 5 2021 – January Jobs Numbers But Still Higher

Before the open investors got the Weekly Initial Unemployment Insurance Claims which pointed to a slight improvement in the employment picture. That helped to put a floor under the market near the open.

The S&P opened the day above Wednesday’s close then dipped back to 3836 before moving higher.

Intraday another new high was made as the index reached 3872. The close was just a point below at 3871 for another strong day for investors.

Stock Market Outlook Chart Comments At The Close on Thu Feb 4 2021 

The S&P moved higher again on Thursday and is nearing the Upper Bollinger Band. The close though left behind a bullish candlestick for Friday ahead of the January non-farm payroll numbers.

The 21 day moving average is rising and the Upper Bollinger Band is primarily sideways but should rise shortly along with the market. The Lower Bollinger Band is still rising but has not moved above the 50 day moving average.

The 200, 100 and 50 day moving averages are still climbing despite last week’s selling.

The chart looks more bullish on Thursday and should see further new highs to end the week.

Stock Market Outlook review of Thu Feb 4 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising and once again 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 Wed Jan 27 2021. On Thursday the down signal is further weakened and could turn to an up signal on Friday if the index climbs.

• 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 positive.

• 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.

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:

3850 is resistance

3800 is support

3750 is support

3700 is light support

3600 is strong support

3550 is support

3500 is strong support

3450 is support

3400 is support

3375 is support

3300 is strong support

3275 is support

3200 is support

3150 is support

3050 is support

3000 is strong support

 Stock Market Outlook for Tomorrow – Fri Feb 5 2021 

For Friday the technical indicators are primarily bullish. Only MACD is still holding a negative signal which should change to positive on Friday.

With all the signals pointing higher, the outlook is for the index to move higher on Friday. Even if the jobs numbers disappoints, we could see a dip but at present, any dip will find ready buyers and will be short-lived.

The index will see another new high on Friday.

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