Looking at the S&P chart below you can see that Thursday saw the S&P index each the Upper Bollinger Band. The move higher from the low on March 23 has been dramatic and driven by a number of factors including short covering and massive liquidity from the Federal Reserve that has not been seen since the credit crisis bear market of 2008 to 2009. Over the long weekend there were dozens of articles from analysts and investors trying to predict the next move for the S&P following what has been a monster rally. The problem is, no one can predict with any certainty which way the rally may move or may end. Part of the problem with predicting another plunge in stocks, is being caused by the huge support from the Fed which basically is determine not to see a major recession or depression caused by the pandemic. That ocean of liquidity has placed a boatload of support underneath stocks.
Stock Market Outlook Chart Comments At The Close on Thur Apr 8 2020
The SPX chart continues to be bearish with 6 sell signals in the chart.
The 200 day moving average is now leading the market, which is typical in a bear market. It is followed by the 50 day and the 100 day. Meanwhile the S&P on Thursday reached the 2800 level and the Upper Bollinger Band. The 21 day moving average has turned sideways which is bullish and the Lower Bollinger Band which has been rising, started to turn back lower on Thursday, a signal that the Bollinger Bands Squeeze may not take place.
The closing candlestick on Thursday is a typical reversal signal indicating we could see some dips on Monday and even a lower close but overall the wave of liquidity from the Fed should keep stocks afloat a lot longer.
With the rally having shown a lot of strength since March 23, a dip would not be unlikely and that is what the closing candlestick from Thursday is advising.
Stock Market Outlook review of Thur Apr 8 2020
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling but remaining 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 Thursday March 26. The up signal was strong again 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 rising and is also above the prior resistance line.
- 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 and is signaling 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 rising and moving into overbought readings.
- 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 indicate any drop in prices on Monday may be temporary.
- 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:
2900 is resistance
2860 is resistance
2840 is resistance
2800 is resistance
2700 is light support and marked a drop of 20.4%.
2675 is light resistant
2650 is light support
2625 is light support
2600 is support
2550 is light support
2500 was good support and marked a correction of 26.3%
2344 is the next level of support and marks a 30.9% correction.
2100 is light support
2000 is good support and marks a drop of 1393 points for a 41% correction. More analysts are jumping onto this level as where the correction is heading.
Stock Market Outlook for Tomorrow – Mon Apr 13 2020
For Monday the technical indicators are still showing strength.
Although the futures are pointing to a weak opening, none of the technical indicators are advising that the rally is over. Most are pointing to the possibility of a dip back following what has been an exceptional rally within the current bear market. None though indicate we should expect a return to the lows from late March.
Instead, a dip down to 2700 would not be unlikely as the index looks for support. The Fed is extremely accommodative making the likelihood of another plunge to old or new lows in equities unlikely at present.
Monday looks set for dips which may be deeper than we saw late last week. Monday will end lower but support for stocks is definitely present. A belief at this point, that stocks are going to collapse back to March 23 lows this week, is unlikely in the current supportive climate from the Fed and Government.
Stock Market Outlook Archives
Stock Market Outlook For Wed May 6 2026 – Choppy But Higher Still
Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
