Stock Market Outlook for Fri Oct 16 2020 – Morning Weakness Possible But Higher Close

Stock Market Outlook Morning weakness possible but higher close

On Thursday the day started with the index opening lower but the morning low was not revisited. By the end of the day the S&P was down just 5 points, closing at 3483 basically leaving the index unchanged from the day before.


Stock Market Outlook Chart Comments At The Close on Thu Oct 15 2020 

On Thursday the index closed above both the 21 and 50 day moving averages and below the Upper Bollinger Band and below 3500 again. The closing candlestick however often signals a possible bounce for the following day.

The Upper Bollinger Band is still turning higher and the Lower Bollinger Band is falling lower, which is bullish.

The 200, 100 and 50 day moving averages are climbing.

The 21 day moving average is also still turning higher. There is little chance it will cross above the 50 day this week however it may still move higher next week which would be bullish.

There are still 6 up signals and 3 down signals. The SPX chart is still showing some weakness or a chance to stall here but it remains above all the moving averages which is still bullish.

Stock Market Outlook review of Thu Oct 15 2020

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling but still 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 Oct 1. On Thursday the up signal was a bit weaker.

  • 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 moving sideways.

  • 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 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 rising which could agree with the closing candlestick today.

  • 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

3500 is resistance

3450 is light 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

2975 is light support

2950 is light support

2900 is light support


 Stock Market Outlook for Tomorrow – Fri Oct 16 2020 

For Friday, the technical indicators have not seen much change except the Rate Of Change is starting to rise and weakness among the other technical indicators is fairly unchanged from Wednesday.

The outlook for Friday is for some weakness in the morning but there is a potential for a bounce and a higher close. A move above 3450 on Friday would be supportive of the bulls and could set next week up for a further rise. A lot will depend on the question of another stimulus package coming through. Without it, stocks may continue weaker heading into the election.


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