Friday saw stocks sell-off in the morning to 2830. From there the S&P drifted sideways but repeated selling was not enough to push the index lower. As selling slowed into the lunch hour, stocks began to climb back. Volume rose and stocks push to 2890 before the index slipped slightly to close the day at 2881 up 10 points on the day for what was a 60 point intraday swing from the lows to the highs of the day. For the S&P it was quite the day.
Stock Market Outlook Chart Comments At The Close on Fri May 10 2019
The drop on Friday took the index almost to the 100 day moving average. The bounce back pushed the index back above the 50 day but left a bearish candlestick.
The Lower Bollinger Band continued to turn lower on Friday and the index closed above the Lower Bollinger Band which sometimes be a bullish signal.
The 21 day moving average is falling but not the 50, 100 or 200 day.
The chart is bearish with only a couple of bullish signals.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and still falling.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Wednesday May 1. On Friday the down signal was stronger 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 signal is positive and it is still 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 a weak up signal in place after Friday’s bounce.
- 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 from being oversold..
- 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 turning sideways indicating not much change is expected for Monday.
- 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 light support
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 May 13 2019
The technical indicators are still weak for Monday but they also show that weakness is being bought into by investors.
Monday looks weak to start the day but indicators are still pointing to the possibility of a bounce either later in the day on Monday or on Tuesday.