Stock Market Outlook for Fri Sep 20 2019 – Sideways With A Bias Up for Sep 20 2019

For Thursday I had expected a dip near the open and then a push higher. That didn’t happen. Instead the S&P opened higher and the index climbed. The problem was the climb higher was on low volume and it could not be sustained. Sellers showed up and the S&P closed almost flat on the day at 3006.79.

Stock Market Outlook Chart Comments At The Close on Thu Sep 19 2019 

The most important event of Thursday was a new buy signal as the 21 day moving average crossed above the 50 day moving average. This is the second buy signal this month and negates the prior sell signals on the index from August.

The 21 day moving average is continuing to climb and will move further above the 50 day moving average on Friday.

The closing candlestick on Thursday is bullish for Friday but it also is often a potential for a reverse where the index instead of climbing, turns lower intraday and starts a move lower in the general market place which can last a day or more. This may not happen on Friday but it should be watched and historically, there is a lot of evidence to suggest the pattern will not be broken and the index will end the day lower.

The 100 and 200 are climbing, signaling further upside is ahead for prices.

The S&P chart is more bullish again, heading into Friday.

Stock Market Outlook review of Thu Sep 19 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and falling.

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

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thurs Aug 29. The up signal was weaker again by the close on Thursday.

• 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 positive and dipping lower.

• 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 still has neutral signal in place.

• 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 has stopped falling and is moving sideways for a second day indicating not a lot of market action is expected for Friday.

• 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 back falling which means prices may decline shortly.

• 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:

3000 is resistance

2960 is good support

2950 is light support

2900 is light support

2860 is light support

2840 is support

2800 is strong support

2795 is light support

2745 to 2750 is light support

2725 is light support

2700 is light support

2675 is light support

2650 is support

2625 is light support

2600 is support.

 Stock Market Outlook for Tomorrow – Fri Sep 20 2019 

The morning looks like stocks will open higher and then dip. They should be able to recover and by the close the SPX and NASDAQ should be higher, even if only by a few points.

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