Stock Market Outlook for Fri Jan 15 2021 – Sideways With Bias Lower

Stock Market Outlook Sideways with a Bias lower

Thursday saw the index climbing higher until by 10:20 the index was above 3820. From there the SPX began to fall. By the end of the day, the index had given up all the gains and closed down 14 points. It was a disappointing end to a potential rally and it brought about a number of technical changes.


Stock Market Outlook Chart Comments At The Close on Thu Jan 14 2021 

On Thursday the index closed below the Upper Bollinger Band and at the low of the day. This left behind a neutral candlestick for Friday.

While the Upper Bollinger Band is continuing to rise, the Lower Bollinger Band is starting to turn back up and looks set to move back above the 50 day moving average. This is bearish should it occur.

The major moving averages are still rising and the up signal from Oct 21 is still in play. The chart is still bullish but there are some bearish signals, as described above.

Stock Market Outlook review of Thu Jan 14 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 Dec 7. On Thursday the up signal fell further and could turn to a down signal shortly.

  • 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 still 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 trending higher which indicates there will be further changes in prices on Friday.

  • 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:

3800 is resistance

3750 is resistance

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 Jan 15 2021 

For Friday, normally we should expect a bounce off the index closing at the low of the day. But at present any bounce will probably be weak. The market did not react positively to news of a $1.9 trillion stimulus package announced on Thursday and that was a surprise. Investors might be doubting the chance of the package being passed. The technical signals have shifted back to lower and the Rate Of Change is rising which often signals that we could expect a wider move which may mean prices could fall further on Friday.

The outlook is still sideways but technically the indicators are advising to stay cautious and expect a lower close and choppy trading on Friday.


Stock Market Outlook Archives

Potential Bounce But Lower
With the 10 year treasury rising to 1.5%, the highest level in over a year (rates were 0.5% in the fall) investors bailed on stocks ....... Read More
Stock Market Outlook Choppy Dips Likely Higher
Wednesday saw the index dip at the open but then recover and push to 3900 and then to 3925 by the close. It was an ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members here are the morning investing strategy notes for Thu Feb 25 2021. There are a number of topics discussed this morning along ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members here are the morning investing strategy notes for Wed Feb 24 2021. There are a number of topics discussed this morning along ....... Read More
Stock Market Outlook - Nice Bounce But Lower
Tuesday saw the S&P tumble all the way to 3805 just above the 50 day moving average within 20 minutes of the market open. That ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members here are the morning investing strategy notes for Tue Feb 23 2021 There are a number of topics discussed this morning along ....... Read More
Stock Market Outlook - Bounce
Monday saw stocks move lower with the S&P ending the day down 30 points to 3876. The NASDAQ though saw a decline of 341 points ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members here are the morning investing strategy notes for Mon Feb 22 2021 There are a number of topics discussed this morning along ....... Read More