On Friday the late day selling sent the technical indicators lower. The most important of these for Monday is the Moving Average Convergence / Divergence. On Friday it confirmed Thursday’s down signal. While we could see the signal negated on Monday if the market pushed back higher, normally this type of down signal will last a few days. Monday and Tuesday will be important for watching the strength of the signal.
Stock Market Outlook Chart Comments At The Close on Fri Jul 19 2019
The index closed below the Upper Bollinger Band again on Friday and at the 21 day moving average.
The closing candlestick is bearish for Monday.
The Bollinger Bands are beginning to see a potential change as the Upper Bollinger Band is still turning lower while the Lower Bollinger Band is pushing above the 50 day. There could be a Bollinger Bands Squeeze setting up for later this week which should be watched.
The 200 day moving average is advancing further above the 2800 level which is bullish and the 100 day continues to move up as well. Note that the 50 day moving average is not actually climbing. That could be a signal to watch.
The chart is bearish for the start of the week.
Stock Market Outlook review of July 19 2019
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and falling for a fifth day.
- 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 confirmed with a lower reading on Friday July 19.
- 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 and falling.
- 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 falling sharply.
- 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 falling.
- 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.
Stock Market Outlook for Tomorrow – Mon Jul 22 2019
For Monday the S&P is looking at a confirmed sell signal from MACD. This tends to be a fairly good indicator of a trend change, even a short-term one so it bears watching.
Technically, all the indicators have turned lower. They are either falling or have already issued down signals, such as the Slow Stochastic.
This does not mean the market is set to tumble and it does not end the rally. It does however indicate there is a lot of weakness in the index which will stall the rally for the start of the week.
We should see a rally or even a couple of rally attempts intraday but the outlook is negative by the close on Monday.
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