The biggest event for Friday came from the comments of White House Advisor Larry Kudlow and President Trump calling for the Fed to cut interest rates by half a percent and end further reductions to the Fed’s balance sheet.
This more than anything, helped to boost stocks higher on Friday.
March ended with mild gains for also ended the best quarter since the third quarter of 2009 and it was the best first quarter since 1998.
Stock Market Outlook Chart Comments At The Close on Fri Mar 29 2019
The S&P closed above the 21 day moving average on Friday.
All major moving averages are back where they belong and the 50 day and 100 day are both moving away from the 200 day. The 50 day moved above the Lower Bollinger Band on Thursday another indication that the market intends to move higher.
The closing candlestick was bullish for Monday.
The SPX looks ready to move higher. We should see the Bollinger Bands Squeeze end this week with the index moving higher. It appears fears of a global recession are beginning to disappear.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and rising.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Friday March 22 2019. The down signal was weaker on Friday.
- 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 turned positive and is rising.
- 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 although it is closer to neutral than down or up.
- 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.
- 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 indicating higher prices are coming for equities.
- 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 Resistance Levels To Be Aware Of:
2900 is strong resistance
2860 is resistance
2830 is light 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.
There was good support at the 2550 level which is back to being support.
The 2500 level is support.
The S&P has light support at 2480 and better support at 2450.
There is good support at 2425.
Below that there is some support at 2400, 2380, 2350.
2300 has the most support at present but would represent a full correction of 641 points as a drop to this level would be 21% and just 5% away from a full bear market signal ending the bull market from 2009.
Stock Market Outlook for Tomorrow – Mon Apr 1 2019
Monday should see the markets open higher and perhaps take a bit of a dip mid-morning but not lower than the open. From there the advance should continue.
The S&P closed at 2834 on Friday. It should tackle 2850 on Monday and try to hold above it.
This is the start of April which has a history of being one of the better months of the year for equities. The S&P usually starts the month off strong and Monday looks strong to begin the week.
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