Stock Market Outlook for Mon Jan 25 2021 – Mixed Outlook But Bias Up

Stock Market Outlook - Mixed

Friday saw stocks facing fairly wide spread but muted selling. While muted to a large degree profits were being taken on the S&P which ended the day down 11 points to 3841.

The NASDAQ meanwhile saw a better day with a fourth positive close for the week. It ended higher by 12 points to 13,543.


Stock Market Outlook Chart Comments At The Close on Fri Jan 22 2021 

On Friday the index closed just below the Upper Bollinger Band but left behind a bearish candlestick for Monday.

The Bollinger Bands are back in bullish mode with the Upper Bollinger Band climbing and the Lower Bollinger Band turning down away from the 50 day moving average.

The major moving averages are still rising and the up signal from Oct 21 is still in play (no longer shown in the chart). The chart is still bullish with only the closing candlestick being slightly bearish.

Stock Market Outlook review of Fri Jan 22 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling and 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 Jan 20. The up signal was still active 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 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 an up 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 falling.

  • 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:

3850 is resistance

3800 is resistance

3750 is support

3700 is light support

3600 is strong support

3550 is support

3500 is strong support

3450 is support

3400 is support

3375 is support

3300 is strong support

3275 is support

3200 is support

3150 is support

3050 is support

3000 is strong support


 Stock Market Outlook for Tomorrow – Mon Jan 25 2021 

For Monday the outlook is more mixed with two technical indicators falling and the remainder still rising from late last week.

The outlook while mixed continues to favor the bulls. Dips should be expected but the day will end higher on Monday.


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