Stock Market Outlook for Mon Jul 15 2019 – Morning Weakness Possible But Higher Close

The S&P on Friday closed above 3000 for the first time. The move higher was dramatic into the last two hours of trading but volume was low. Normally this indicates the rally will retest the breakout, which would be the 3000 level.

Stock Market Outlook Chart Comments At The Close on Fri Jul 12 2019 

The index closed below the Upper Bollinger Band again but above all the major moving averages.  The closing candlestick was bullish for Monday but the candlestick for Friday was a potential reversal which could mean some weakness for Monday.

The Bollinger Bands are both moving higher with the Lower Bollinger Band now above the 100 day moving average. Often this indicates that the next move will be higher for the index. The Middle Bollinger Band or 21 day moving average is climbing higher daily.

The buy signal from June 28 with the 21 day moving above the 50 day, is still gaining strength.

The 200 day moving average is moving higher above the 2800 level which is bullish and the 100 day continues to move up.

The chart is bullish for Monday but the chance of a dip down to 3000 is large.

Stock Market Outlook review of July 12 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and rising.

• 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 June 6. The up signal was a bit stronger on Friday but it has weakened each day since July 3 when the signal was 6.52.

• 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 positive and moving sideways, unchanged.

• 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 an up signal in place for Monday and is still showing the index as 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 moving higher back 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.

• 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

2950 is light support

2900 is light support

2860 is better support

2830 is light 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.

There was good support at the 2550 level which is back to being support.

The 2500 level is support.

The S&P has light support at 2480 and better support at 2450.

There is good support at 2425.

Below that there is some support at 2400, 2380, 2350.

 Stock Market Outlook for Tomorrow – Mon Jul 15 2019 

For Monday the S&P looks set to retest the 3000 level before attempting to move higher.

MACD needs to be watch for signals below 3 if they should occur. At present, while MACD has weakened from the initial up signal, it remains strong enough for the market to continue the advance.

Most of the technical indicators are still pointing to a higher day on Monday. That means any dips are opportunities to setup more trades.

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