Stock Market Outlook for Mon Aug 30 2021 – Choppy Dips Likely But Higher Close

On Friday Aug 27, Fed Chair Powell advised the Fed would begin tapering its bond purchases before the end of the current year but not raise rates. That embolden many investors who see this as the Fed being aware of rising inflation while also working to keep the economy from falling into a recession by keeping interest rates at historic lows.  Index rose strongly with more new highs. The S&P ended the day up 39 points at 4509 on good volume considering it is the end of the summer holiday period for many investors.

Let’s review Friday’s closing technical numbers and look out to Mon Aug 30 2021.

Stock Market Outlook Chart Comments At The Close on Fri Aug 27 2021 

Both Bollinger Bands are moving further apart with the Lower Bollinger Band falling below the 50 day moving average on Friday.  The index ended the day at the Upper Bollinger Band.

The closing candlestick for Monday is bullish.

The Lower Bollinger Band is just below the 50 day moving average.

All the major moving averages are still climbing which is bullish. For Monday the SPX chart remains bullish to head into the start of September.

stock market outlook review of Fri Aug 27 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising and positive.

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

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Wednesday Aug 18. On Fri Aug 27 a new unconfirmed up signal was issued.

• 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 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 and is 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.

• 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.

• 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:

4525 is resistance

4500 is resistance

4490 is resistance

4475 is light support

4450 is light support

4400 is good support

4370 is good support

4350 is light support

4300 is light support

4290 is light support

4270 is light support

4250 is good support

4225 is light support

4200 is good support

4175 is light support

4150 is light support

4100 is good support

4070 is light support

4050 is light support

4000 is good support

3900 is support

3850 is support

3800 is support

3750 is good support

3700 is light support

3680 is light support

3600 is strong support

 Stock Market Outlook for Tomorrow – Mon Aug 30 2021 

For Monday the index is starting the week on the back of a strong rally on Friday. Normally with the technical indicators dominantly positive we should expect a choppy day of trading and a small gain in the markets.

Friday this week brings us the August jobs numbers. We should see the markets keep a bullish bias ahead of those numbers.

Monday will be choppy with dips but those dips are still opportunities for more trades. The day will end with a small gain in the index.

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