On Friday the S&P made another new all-time high reaching 4191 before closing at 4185, up 15 points on the day.
The NASDAQ closed back above 14,000 for the second straight day, ending at 14052 just 123 points below its all-time high of 14175.
Let’s review Friday’s close to see what it can tell us about Monday.
Stock Market Outlook Chart Comments At The Close on Fri Apr 16 2021
The Upper Bollinger Band is continuing to rise which is bullish. The index on Friday closed just below the Upper Bollinger Band. This is the ninth overbought signal from the SPX chart and shows an extremely overbought index.
The Lower Bollinger Band is falling and on Friday it moved below the 100 day moving average, a bullish signal.
The closing candlestick on Friday is bullish but at the same time, often signals dips should be expected.
The 21 day moving average is climbing higher away further away from the 50 day moving average which is bullish.
The 50, 100 and 200 day moving averages are all climbing higher.
Overall the S&P chart is very bullish and signaling overbought.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and falling again.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday March 29 2021. On Friday the up signal continued to gain some strength.
- 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 and still signaling overbought.
- 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 neutral signal in place and is showing the index as extremely 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 overbought.
- 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 also 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:
4150 is light support
4100 is light support
4070 is very light support
4050 is light support
4000 is Support
3900 is support and the 50 day is just above this at 3933.
3850 is support
3800 is support and the 100 day is just above this level.
3750 is good support
3700 is light support
3680 is light support
3600 is strong support and the 200 day is just above this level.
Stock Market Outlook for Tomorrow – Mon Apr 19 2021
The index is still extremely overbought.
There are signals advising that the index will see some dips and at some point there will be a negative day or two.
However until the signals change, dips and negative days are opportunities to setup more trades.
Signals at the close on Friday are pointing to some deeper dips on Monday, probably below 4175 or 4170 which was Friday’s low. But those dips will be opportunities as the index will break through 4200 either Monday or early this week.
The outlook is still bullish for the start of the third week of April.