Thursday saw a very tight day of trading with the S&P reaching a high of 3120 mid-morning and a low of 3093 at the open. For most of the day the index stayed above 3100. A late afternoon rally sent the index to a close of 3115. This is another day where the index is pushed back higher in the final hour of trading.
Stock Market Outlook Chart Comments At The Close on Thu Jun 18 2020
There was not a lot of changes in the index on Thursday. The S&P closed below the Upper Bollinger Band again but stayed above the 21 day moving average, the entire day. The choppy trading left behind a bearish candlestick for Friday.
The S&P is in another Bollinger Bands Squeeze which could send the index lower or higher. The Upper Bollinger Band is falling while the Lower Bollinger Band is rising which has the index in a squeeze.
The 100 day moving average is now at the 200 day in what has been a lengthy and slow climb. The 50 day is still climbing toward the 100 day and cold cross it as early as next week which would be another up signal.
There are still 3 major up signals in the chart (see below).
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and 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 Friday June 12. The down signal was unchanged 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 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 in place for Friday.
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 unchanged 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 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:
3200 is resistance
3150 is resistance
3050 is support
3000 is support
2975 is light support
2950 is light support
2900 is light support
2860 is light support
2840 is light support
2800 is good support
2725 is light support
2700 is light support and marked a drop of 20.4%.
2675 is light resistant
2650 is light support
2625 is light support
2600 is support
2550 is light support
2500 was good support and marked a correction of 26.3%
2344 is the next level of support and marks a 30.9% correction.
2191 was the market low on March 23
2100 is light support
2000 is good support and marks a drop of 1393 points for a 41% correction. Some analysts still believe the index will fall this low in the second half of 2020.
Stock Market Outlook for Tomorrow – Fri Jun 19 2020
Thursday’s sideways market was more bullish than bearish and turned most of the technical indicators from falling to rising.
MACD still has a strong down signal in place but the other indicators are primarily rising.
Friday looks somewhat similar to Thursday with a sideways outlook but a close higher is expected as the technical indicators are primarily rising.