On Thursday stocks were having a tough day as they continued to see weakness until in the afternoon, news of a possible Covid-19 stimulus before the end of the year, shot stocks higher.
The S&P ended the day up 14 points to close at 3581.87 but still below the 3600 level.
Stock Market Outlook Chart Comments At The Close on Thu Nov 19 2020
Thursday saw the index close below the 3600 level. The closing candlestick is bearish for Friday
The Upper Bollinger Band continues to climb above SPX 3600 closing around 3675 on Thursday. The Lower Bollinger Band is falling and may each the 200 day moving average on Friday.
The 21 day, 50 day, 100 day and 200 day moving averages are all rising, a bullish sign. The up signal from Oct 21 is still in play, and the chart remains bullish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Nov 5. On Thursday the up signal was weaker for a third straight day.
- 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..
- 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 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 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:
3600 is resistance
3550 is resistance
3500 is support
3450 is support
3400 is support
3375 is support
3300 is support
3275 is support
3200 is support
3150 is support
3050 is support
3000 is support
Stock Market Outlook for Tomorrow – Fri Nov 20 2020
The closing candlestick on Thursday indicates we could see further weakness in the morning on Friday.
The technical indicators meanwhile are somewhat mixed. MACD is continuing to weaken and the Slow Stochastic has a down signal in place for Friday. Momentum is also falling.
The other indicators though are showing some strength and the possibility of an up day could still occur.
Overall though the outlook remains mixed for Friday with a better chance for a negative close than a positive one. The rally though is still intact and it won’t take much to get the S&P back above 3600.