Thursday saw little evidence of sellers moving back into the markets. Instead the index slipped to 2722 late morning and then rose to just above 2750 until around 3:00 PM. The close saw very slight losses with a decline of only 6 points.
Stock Market Outlook Chart Comments At The Close on Thu Nov 29 2018
The S&P index reached the 200 day moving average again on Thursday but closed just below it. This marks the second day of the index closing above the 21 day moving average.
The 50 day moving average has fallen to the 100 day but this may be an incorrect signal as the market outlook is changed to up.
The 21 day moving average is rising as is the 200 day and 100 day.
The Lower Bollinger Band is also rising which is also bullish.
The SPX continues to struggle against 3 major sell signals but the 2700 level has been broken through for two days which is bullish.
The chart is still rather bearish and we could see the index slip back to below the 21 day but overall the outlook is still up for the market.
Stock Market Outlook review of Tue Nov 27 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 Wed Nov 28 2018. The up signal was confirmed today.
- 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 rising and overbought.
- 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 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 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:
2900 was good support – this will be strong resistance
2860 was good support – this will be resistance
2830 was light support and will be light resistance
2795 is light resistance
2745 to 2750 are light resistance
2725 is support
2700 is support
2675 is light support
2650 is light support
2620 is light support
2600 is strong support and held the market up from the lowest pullback in the present correction
There is good support at the 2550 level from where the market bounced back from the recent correction low on Feb 9.
The S&P has light support at 2480. It also has light support at 2450 and 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 bear market signal ending the bull market from 2009.
Stock Market Outlook for Tomorrow – Fri Nov 30 2018
The technical indicators are turning bullish. MACD and the Slow Stochastic both has up signals in place.
The index is overbought so a dip should be expected and could push the index back below the 21 day moving average, however it should be temporary.
For Friday the S&P should drift sideways with a slight bias to the upside ahead of the G20 summit.
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