Friday saw indexes finally rally strongly.
The close saw the S&P up 41.08 points closing at 2888.68.
This almost recovers all the losses from Wednesday.
Stock Market Outlook Chart Comments At The Close on Fri Aug 16 2019
Friday saw the S&P push higher above the 200 day moving average. It reached the 100 day moving average before closing slightly below it.
The 21 day moving average fell below the 50 day on Friday which issued another sell signal on the S&P.
The 100 day moving average which had been trying to break above the 2900 valuation fell back and closed just below the 2900 day confirming a down move for the index.
The 200 day moving average is still moving higher and is, at present, holding the S&P up from a further decline.
The closing candlestick on Friday was bullish for Monday.
The Upper Bollinger Band and Lower Bollinger Band are continuing to turn lower which is bearish.
Overall the index chart is more bearish than bullish due to the new sell signal on Friday from the 21 day moving average.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising but still 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 Thursday July 18. The down signal was a bit weaker on Friday but still reasonably strong.
- 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 negative but back trying to rise.
- 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 signal has a down 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 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 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:
3000 is resistance
2960 is light resistance
2900 is light resistance
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 – Mon Aug 19 2019
Monday should start with a spike higher but then a dip back lower to look for some support.
The index is still bullish enough to see the rally push higher for another day but overall the market still needs a further catalyst to the upside to break and stay above 2950.
On Monday the index should push above 2900 easily but dips below 2900 will occur during the day. Despite this there is a good chance for the index to close above 2900 on Monday. That could setup Tuesday though, to close weaker.