Stock Market Outlook for Fri May 24 2019 – Potential Bounce But Lower

Potential Bounce But Lower

Thursday saw stocks move lower and once again come close to challenging the support at the 2800 level.

During the day the index slipped to below the 100 day moving average although it managed to push back up and close at the 100 day, an important technical barrier.


Stock Market Outlook Chart Comments At The Close on Thu May 23 2019 

On Thursday the index fell below the 100 day moving average and reached the Lower Bollinger Band. That band is just above 2800 having fallen through the 50 and 100 day moving averages.

The drop to the 100 day resulted in the S&P bouncing in the final hour of trading and closing off the Lower Bollinger Band but back at the 100 day moving average, Despite the bounce, the action is bearish.

The 21 day moving average has fallen almost to the 50 day. A drop below the 50 day would be another bearish signal to the downside should it occur.

The chart is weaker for Friday.

Stock Market Outlook review of Thu May 23 2019


Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is negative and falling.

  • Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Wednesday May 1. On Thursday the down signal was weaker than Monday but rose from Wednesday’s close.

  • 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 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 signal is pointing down for stocks.

  • 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 falling.

  • 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:

2950 is resistance

2900 is resistance

2860 is light support

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.


 Stock Market Outlook for Tomorrow – Fri May 24 2019 

The technical indicators are more negative at the close of trading on Thursday. There are a number of sell signals now in place and the index fell to the 100 day moving average on Thursday. Most signals are now quite bearish. This has created an oversold condition for Friday which may set up a potential morning bounce but the close will be slightly more negative.


 

Stock Market Outlook Archives

Stock Market Outlook - choppy bias higher
On Wednesday the index spent the morning practically sideways ahead of the Fed’s decision on interest rates. At 2:00 PM the market initially dropped on ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members here are my morning investing strategy notes for Wed Jun 19 2019. These morning notes before markets open contain a number of ....... Read More
Stock Market Outlook All About The Fed
On Tuesday June 18, before markets opened, news of a planned G20 meeting between President Trump and President Xi sent futures soaring. Added to the ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members here are my morning investing strategy notes for Tue Jun 18 2019 These morning notes before markets open contain a couple of ....... Read More
Sideways with up bias still in place
On Monday the S&P opened higher, dipped slightly and then attempted to challenge the 2900 level, coming within 3 points of reaching it. From there ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members here are my morning investing strategy notes for Mon Jun 17 2019 These morning notes before markets open contain a couple of ....... Read More
Stock Market Outlook Higher Open Higher Close
On Friday the S&P and NASDAQ ended with slight losses. The day saw lower volumes and a declining in volatility. Despite the choppy day of ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members here are my morning investing strategy notes for Fri Jun 14 2019. These morning notes before markets open contain a couple of ....... Read More
Loading...