Thursday’s market was stronger than the technical indicators had indicated although they still called for a higher day. The strength of the rally was broad-based and in every sector. The S&P rose 74.46 to close at 4438 and the NASDAQ rose 251.79 to close at 14,823.
The MACD indicator confirmed yesterday’s up signal, during the day today. Today’s rally boosted the S&P return to 3% for the month of October and 18% for the year. The NASDAQ today is up 2.5% and 15% for the year. These are excellent returns for the index.
Overall the rally today should set up the market to move higher.
Let’s review Thu Oct 14 2021 closing technicals and see what to expect to end the week.
Stock Market Outlook Chart Comments At The Close on Thu Oct 14 2021
The most important signal in the chart is a second bullish candlestick to end the day. Wednesday’s and Thursday’s candlestick are pointing to a higher Friday.
In the chart below you can see the candlestick closed at the 50 day moving average.
Meanwhile the Upper Bollinger Band is still falling but the Lower Bollinger Band is starting to trend sideways. Next week we could see a Bollinger Bands Squeeze to push the index back up.
The 21 day moving average which fell below the 50 day last week, is continuing to fall and is now below the 4400 level. The 50 day is also falling. This is bearish. Note how today’s rally started at the 21 day and ran all the way to the 50 day. That’s bullish.
The 100 and 200 day moving averages are continuing to turn lower as well. This remains bearish.
For Friday there are a few more bullish signals although the chart does still reflect more bearish sentiment. Friday though should be higher.
Stock Market Outlook review of Wed Oct 13 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising sharply and back 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 Wed Oct 13 2021 . On Thu Oct 14 2021 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 is rising and positive.
- 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 and starting to rise.
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 for a second day.
- 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 for a second day.
- 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:
4550 is resistance
4525 is resistance
4500 is resistance
4490 is resistance
4475 is resistance
4450 is light resistance
4400 is support
4370 is light support
4350 is light support
4300 is light support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
4175 is light support
4150 is light support
4100 is good support
Stock Market Outlook for Tomorrow – Fri Oct 15 2021
For Friday the outlook is up. The index on Thursday closed at the highs of the day on good volume. Normally we can expect a dip to start the day off but then buyers who missed the rally yesterday will try to jump into stocks they wished they had bought yesterday. That will push the index higher on Friday into the close.
In the latest correction, we have seen many of these big one day rallies given back, so don’t be surprised by a dip, even a deep one. I’ll be using dips to buy SPY calls and selling them out in spikes higher as once again, dips are an opportunity to setup more trades.
Stock Market Outlook Archives
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Stock Market Outlook for Mon Apr 22 2024 – No Change – Deeply Oversold Bounce Possible
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Morning Investing Strategy Notes for Thu Apr 18 2024
Stock Market Outlook for Thu Apr 18 2024 – Deeply Oversold – Bounce Attempt Expected
Morning Investing Strategy Notes for Wed Apr 17 2024
Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt
Morning Investing Strategy Notes for Tue Apr 16 2024
Stock Market Outlook for Tue Apr 16 2024 – Deeply Oversold
Morning Investing Strategy Notes for Mon Apr 15 2024
Stock Market Outlook for Mon Apr 15 2024 – Expect A Bounce
Morning Investing Strategy Notes for Fri Apr 12 2024
Stock Market Outlook for Fri Apr 12 2024 – All About Bank Earnings
