Thursday saw investors take profits. The slip back to 3025 a number of times during the day, easily found buyers. Support is being built for a potential move higher. On Friday, investors get the jobs numbers from October.
Stock Market Outlook Chart Comments At The Close on Thu Oct 31 2019
The SPX chart is bullish and closed above 3000 again on Thursday. The Upper Bollinger Band is rising and the Lower Bollinger Band is turning back up, often a signal of a possible change in current direction. This will need to be watched.
The closing candlestick on Thursday is bullish for Friday.
All the major moving averages are climbing including the 50 and 21 day moving averages. The 21 day moving average is nearing the same height we saw late September. A break above will be bullish.
The two buy signals from September are still in place.
The 200 day moving average is at the Lower Bollinger Band which may prove to be bearish shortly. This also needs to be watched.
Stock Market Outlook review of Thu Oct 31 2019
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and moving more sideways than up or down.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tue Oct 15 2019. The up signal was strong on Thursday but down from Wednesday.
- 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 and is extremely 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 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.
- 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:
3000 is support
2960 is light support
2950 was light support
2900 is light support
2860 is light support
2840 is 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.
Stock Market Outlook for Tomorrow – Fri Nov 1 2019
Friday is about jobs as investors get the jobs numbers from October. However the technical indicators are also indicating there is a bit of weakness growing in the rally. The Slow Stochastic continues to point to a move lower and Relative Strength Index (RSI) is also falling.
MACD however is still quite strong and the Rate Of Change is also rising quickly. Overall the technical indicators are still bullish but there are some signals, as explained above, that are pointing to growing weakness.
The outlook is still up for stock indexes even if the jobs numbers on Friday send the index lower. Any dip will be temporary, and an opportunity for more trades.
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