On Friday the S&P and NASDAQ ended with slight losses. The day saw lower volumes and a declining in volatility. Despite the choppy day of trading the VIX index closed at the lowest level for the week, falling each day as investors showed little concern about the rally slowing.
Stock Market Outlook Chart Comments At The Close on Friday June 14 2019
On Friday the index closed above the 50 day moving average for a fifth day and left behind another weak bullish candlestick.
There is still one sell signal in play but the 21 day is still turning higher and should it move above the 50 day, it will negate that sell signal.
The Upper Bollinger Band is moving higher and the Lower Bollinger Band is moving lower indicating ore upside is expected.
Aside from the one sell signal, the chart is very bullish with the major moving averages are climbing higher with the 200 day nearing the 2800 level.
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 weaker on Friday but not enough to change the trend up.
- 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 for the most part 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 is pointing slightly down but more neutral than either up or down.
- 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 sideways and it is overbought.
- 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 in a slight dip for a second day which could indicate some weakness early this week.
- 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 Resistance Levels To Be Aware Of:
2950 is resistance
2900 is resistance
2860 is light 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 Jun 17 2019
For Monday the signals are showing that the rally has slowed although there are still enough technical indicators pointing up, for the rally to stay intact.
Monday’s signals show a higher open and a probable higher close depending on how strong the open is.
The indicators show a modestly higher open and then an equally modest close but with investors expecting an interest rate cut mid-week by the Fed, investors may get carried away and push the S&P back above the 2900 level on Monday.
A close above it is not expected but could happen. A negative close is not expected.