On Friday the S&P made another new intraday day high, reaching 4238 and ended with a new closing high of 4233 on the back of a disappointing April Jobs report that added in just 266,000 new jobs which sent the unemployment rate to 6.1%. Investors believe this will help keep the Fed from raising interest rates earlier than projected.
Stock Market Outlook Chart Comments At The Close on Fri May 7 2021
The Bollinger Bands Squeeze is tightening further and the closing candlestick on Friday was at the Upper Bollinger Band. There is a good chance the index will break above the Upper Bollinger Band on Monday which may signal the start of the unwinding of this latest Bollinger Bands Squeeze.
The closing candlestick on Friday is bullish for Monday.
The 21 day moving average is climbing higher and further away from the 50 day moving average which is bullish.
The 50, 100 and 200 day moving averages are all climbing higher.
Overall the S&P chart is bullish with only the Bollinger Bands Squeeze as a slightly bearish signal.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive but fell on Friday despite the rise in the index.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Friday April 30 2021. On Friday the signal lower was a weaker again.
- 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.
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 rising.
- 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:
4250 is resistance
4225 is resistance
4200 is resistance
4150 is light support
4100 is light support
4070 is very light support
4050 is light support
4000 is Support
3900 is support
3850 is support
3800 is support
3750 is good support
3700 is light support
3680 is light support
3600 is strong support
Stock Market Outlook for Tomorrow – Mon May 10 2021
For Monday the majority of technical indicators are rising. MACD is losing the down signal and the Bollinger Bands Squeeze looks like the index may push higher out of the squeeze.
Often though when we have seen the technical indicators leaning heavily up the index has risen but then dipped back. On Monday then, expect a higher close but after an initial bounce at the open or early morning, watch for dips.
A new intraday high is expected on Monday.