On Thursday the S&P managed to hang onto the 4475 valuation but it was a rather wild day with two big swings. In the early morning the opening jump was immediately sold into and the index collapsed to just below 4445 reaching the 50 day moving average. That commenced a choppy rally which by the end of the day had recovered the morning sell-off and saw the S&P back to 4485 before closing at 4473. There are quite a few changes in the technical indicators for Friday’s triple witching session.
Let’s review the closing technical signals to see what they advise investors should expected for Fri Sep 17 2021.
Stock Market Outlook Chart Comments At The Close on Thu Sep 16 2021
The Lower Bollinger Band is back falling lower which is bullish. The Upper Bollinger Band is falling which is bearish.
The index slipped to the 50 day again on Thursday after opening at the 21 day moving average. By the end of the day, the S&P was back at the 21 day moving average but not above it. This left behind a bearish candlestick for Friday.
The 21 and 50 day moving averages are also dipping lower which is bearish.
Only the 100 and 200 day moving averages are climbing. For Friday there are more bullish signals but there are also still bearish ones to remain aware of. Thursday was the third day of the 50 day moving average holding the market from falling further.
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 a down signal on Thu Sep 9. On Thursday the down signal lost more strength but remains quite strong to the downside.
- 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 out of oversold readings.
- 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 as is moving just above oversold readings.
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 and no longer oversold.
- 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:
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 17 2021
For Friday the S&P is facing mixed signals. There are still strong signals to the downside but almost an equal number pointing back to up. Overall the technical indicators are slightly biased lower.
Historically the third Friday in September which is triple witching has been higher 70% of the time.
For Friday then, watch for dips which could again be deep but not down to the 50 day moving average. Then watch for another close slightly higher than Thursday’s close and probably above the 21 day moving average.