On Thursday investors regained their senses and realized that with no interest rate hikes planned for 2019, the market could run higher. A slight dip started the day but then it was all uphill. By the end of the day the S&P had gained 30 points and the NASDAQ was up 110. The Dow moved above 26000 for a short period but closed below it at 25,962, adding on 216 points for the day.
Stock Market Outlook Chart Comments At The Close on Thu Mar 21 2019
Today the S&P issued the 6th and final up signal with the 50 day moving above the 100 day moving average. This now sets the S&P up for a return to the bullish pattern of the 21 day, followed by the 50 day, 100 day and then 200 day moving averages. This is a big up day for the bulls.
The Bollinger Bands Squeeze is also beginning to end and with it, the index has been pushed higher and looks ready to continue that move up.
The closing candlestick is bullish for Friday.
The index also closed above the 21 day moving average for the ninth day clinging to the Upper Bollinger Band which is bullish.
With the final up signal today, the ends the down signal from the start of October 2018 through to the end of December, 2018.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and rising.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tuesday March 19 2019. Today the up signal was confirmed.
- 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 positive and 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 overbought. As this signal looks out longer than a single day we could see weakness not on Friday but on Monday.
- 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 and overbought.
- 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, indicating that prices should be moving higher.
- 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 is strong resistance
2860 is resistance
2830 is light support
2800 is strong support
2795 is light support
2745 to 2750 is light support
2725 is light support
2700 is light support
2675 is light support
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 Mar 22 2019
It was a strong day after an initial dip at the outset of trading on Thursday. This should set up the S&P for a dip early morning and then a rally higher in what will be a choppy session.
The technical indicators are far more bullish than bearish. Only the Slow Stochastic is still signaling a down day is coming up. That could be Monday.
For tomorrow though, the index will close higher on Friday.
Monday could see some weakness creep into the market. We will know more by the close of trading on Friday.
Stock Market Outlook Archives