The S&P closed up just 4 points on Friday at 3943 but it was near the high of the day.
The NASDAQ closed down 78 points to end the day at 13,319.
The main story was the Dow Jones which rallied almost a full percent to close up 293 points to 32,778 for another new closing high. Intraday the Dow reached 32,793 for another new all-time high.
Let’s review Friday’s closing technical indicators to see what’s in store for the start of the third week of March 2021.
Stock Market Outlook Chart Comments At The Close on Fri Mar 12 2021
The Bollinger Bands Squeeze widened further again on Friday. This remains bullish for the index. The closing candlestick on Friday was bullish but also is often seen before a down day. That means Monday could see some weakness.
The index closed up just 4 points but did stay above Thursday’s lows and above the 21 day moving average which remains bullish for stocks.
The 21 day moving average is still moving lower but has a good chance to turn back higher.
The 50, 100 and 200 day moving averages are climbing higher. You can see in the chart the 50 day moving average is climbing steadily toward the 21 day. As long as it does not cross above the 21 day, the trend remains bullish. If it does cross the 21 day, watch for volatility and more weakness.
The chart is still more bullish for the start of the third week of March. The dip from the first week of March may prove to be the low for the month.
Stock Market Outlook review of Fri Mar 12 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 an up signal on Thursday March 11 2021. On Friday that signal was confirmed with a much stronger reading.
- 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 dipping slightly on Friday but not yet a concern.
- 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 for a fifth straight day and starting to head back into overbought signals.
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 right at overbought signals and moved sideways by the close on Friday. Usually this indicates we shouldn’t expect a strong start to the third week of March.
- 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 also turned sideways by the close which also indicates not to expect a big jump higher or lower for prices to start off the 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 and Resistance Levels To Be Aware Of:
4000 is resistance
3900 is resistance
3850 is support
3800 is support
3750 is good support and has assisted in keeping the selling in check
3700 is light support
3680 is light support – The 100 day moving average is at this valuation.
3600 is strong support
3550 is support
3500 is strong support
3450 is support. The 200 day moving average is just above this valuation. A drop this low would represent an 11% correction.
Stock Market Outlook for Tomorrow – Mon Mar 15 2021
For Monday, the 3850 valuation has returned to support for the S&P but the 3900 level is still resistance. There is no support yet from where the index closed on Friday at 3943 and 3850.
The technical indicators are bullish especially MACD which confirmed Thursday’s up signal. A number of indicators though as already starting to show signs of being overbought and three indicators, Rate Of Change, Relative Strength Index (RSI) and Ultimate Oscillator are signaling that investors should expect a big move higher to start the week. At the same time, none are indicating investors should expect a big move lower either.
That means to start the week investors should expect some dips but sideways with a bias to the upside is still the best outlook to expect.
The 10 year Treasury on Friday reached 1.62% which placed a dampening effect on the intraday S&P rally and was a prime reason for the index closing up just 4 points. This week we get the Fed’s decision on interest rates and while no one expects to see any rate change markets usually are volatile in the day’s leading to the announcement. That means the start of the week could see some bigger swings which would work well for profiting in the SPY ETF Hedge strategy trades.
A further move higher in the 10 year will definitely dampen enthusiasm for buying more stocks so keep an eye on that treasury indicator this week.
Stock Market Outlook Archives
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Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
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