Stock Market Outlook for Fri Sep 10 2021 – Bounce Expected

Thursday saw the S&P start the day with a bounce but then investors gave back the rally and ended the day down 20 points to close below 4500 at 4493.

This though setup the index for a probable bounce on Friday.

Let’s review the technical readings from Thursday’s close and see what to expect for Friday.

Stock Market Outlook Chart Comments At The Close on Thu Sep 9 2021 

The Lower Bollinger Band is climbing higher which is bearish. The Upper Bollinger Band is still rising, which is bullish.

The closing candlestick on Wednesday is often indicative of a bounce coming as it closed at the 21 day moving average which itself is still climbing.

All the major moving averages are still climbing which is also bullish. For Friday the SPX chart remains bullish despite the Lower Bollinger Band.

Stock Market Outlook review of Thu Sep 9 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling and negative.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Fri Aug 27. On Thu Sep 9 2021 an unconfirmed down signal was issued.

• 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 falling.

• 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 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 and Resistance Levels To Be Aware Of:

4550 is resistance

4525 is resistance

4500 is resistance

4490 is resistance

4475 is light support

4450 is light support

4400 is good support

4370 is good 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

4070 is light support

4050 is light support

4000 is good support

3900 is support

3850 is support

3800 is support

3750 is good support

3700 is light support

3680 is light support

3600 is strong support

 Stock Market Outlook for Tomorrow – Fri Sep 10 2021 

For Friday the technical indicators are all showing weakness but the closing candlestick points to a probable bounce on Friday.

With all the technical indicators pointing lower, including an unconfirmed down signal from MACD, investors should expect a bounce. Normally this many down signals in the technical indicators points to a bottom from selling, even just interim, before a bounce.

I am expecting a higher close to end the day on Friday.

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