Thursday Jan 24 was a stronger day for the bulls. The S&P did not revisit the lows from Tuesday or Wednesday but instead stayed above the 2625 support level. It was unable to break through 2650 but it closed just 8 points below it at 2642.
Stock Market Outlook Chart Comments At The Close on Thu Jan 24 2019
The S&P chart is still bearish with 6 sell signals.
The first sell signal was Oct 17. It is now off the 3 month chart but I left it on the chart as a reminder. The second sell signal on Oct 26 will also be off the chart shortly and I will place it with the first sell signal as a reminder.
The S&P did not slip all the way to the 50 day moving average today. However the choppy market action left behind a bearish candlestick for Friday.
Of the moving averages only the 21 day is rising. The 200, 100 and 50 are all moving lower. This makes the rally highly suspect that the index will pullback.
The Upper Bollinger Band is above the 200 day moving average which is bullish. Tonight though the Lower Bollinger Band is starting to rise which could signal that we will shortly see a Bollinger Bands Squeeze form.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and falling.
- 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 Jan 4 2019. That up signal was weaker again on Thursday.
- 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 signal 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 a down signal in place for Friday 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 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 also 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 Resistance Levels To Be Aware Of:
2900 was support – this will be strong resistance
2860 was support – this will be resistance
2830 was light support and will be light resistance
2800 is strong resistance
2795 is light resistance
2745 to 2750 is light resistance
2725 is light resistance
2700 is resistance
2675 is light resistance
2650 is support
2625 is light support
2600 is support.
There was good support at the 2550 level which is back to being support.
The 2500 level is support.
The S&P has light support at 2480 and better support at 2450.
There is good support at 2425.
Below that there is some support at 2400, 2380, 2350.
2300 has the most support at present but would represent a full correction of 641 points as a drop to this level would be 21% and just 5% away from a full bear market signal ending the bull market from 2009.
Stock Market Outlook for Tomorrow – Fri Jan 25 2019
For Friday, the technical indicators are not as weak as they were earlier this week. There are now 4 indicators that are climbing and two that are falling. Disappointing earnings from Intel and Western Digital today, after the close, will pressure stocks at the open. Momentum though is strengthening for a move higher.
Friday should be another day of dips and weakness with choppy action, but the bias is shifting to the upside.
Stock Market Outlook Archives
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Morning Investing Strategy Notes for Tue Apr 30 2024
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Morning Investing Strategy Notes for Mon Apr 29 2024
Stock Market Outlook for Mon Apr 29 2024 – Some Weakness But Higher
Morning Investing Strategy Notes for Fri Apr 26 2024
Stock Market Outlook for Fri Apr 26 2024 – Higher and Positive Close
Morning Investing Strategy Notes for Thu Apr 25 2024
Stock Market Outlook for Thu Apr 25 2024 – Weakness and Lower
Morning Investing Strategy Notes for Wed Apr 24 2024
Stock Market Outlook for Wed Apr 24 2024 – Some Weakness But Higher Close
Morning Investing Strategy Notes for Tue Apr 23 2024
Stock Market Outlook for Tue Apr 23 2024 – Bounce But Lower
Morning Investing Strategy Notes for Mon Apr 22 2024
Stock Market Outlook for Mon Apr 22 2024 – No Change – Deeply Oversold Bounce Possible