Friday saw the S&P jump higher at the open but then spend the rest of the day drifting sideways with a bias lower. The close saw the index end the day almost flat with a loss of just 3 points.
It was a triple witching day but volumes were low as if investors were already preparing for memorial day weekend which is still a week away. Higher volumes were expected and for triple witching, are the usual norm. This could setup Monday for a choppy day especially with Bitcoin continuing its sell-off over the weekend. Let’s review the closing technical indicators for Friday May 21 to see what they predict for the start of the 4th week of May.
Stock Market Outlook Chart Comments At The Close on Fri May 21 2021
The Bollinger Bands are continuing to widen which is a bullish sign. The Lower Bollinger Band is fell below the 50 day moving average which is a bullish signal.
The S&P moved above the 21 day moving average but ended the day back just below it. This is continuing to cause the 21 day moving average to fall which is bearish.
Meanwhile the Upper Bollinger Band which was rising is now trending sideways. If it turns lower, we should expect the index to dip to star the week.
The closing candlestick on Friday was bearish for Monday.
The strongest bullish signals are from the 50, 100 and 200 day moving averages which are still climbing.
The chart is becoming more mixed with the index unable to get back above the 21 day moving average and yet still within easy reach of the old highs. Each day that the index fails to break above the 21 day is a signal of weakness. With lower volumes in trading overall, there are growing signals of another dip in the index. The turmoil with Bitcoin is impacting stocks as well.
Stock Market Outlook review of Fri May 21 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and falling lower.
- 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 down signal lost further strength but it remains fairly negative.
- 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 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 has an up signal in place for Monday although it is quite weak.
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 unhanged.
- 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 for a third day signaling we should see higher prices at the start of 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:
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 and where the 50 day is currently residing. This would represent a 4.4% decline.
4000 is good support
3900 is support and just below the 100 day moving average.
3850 is support
3800 is support
3750 is good support
3700 is light support and just below the 200 day moving average.
3680 is light support
3600 is strong support
Stock Market Outlook for Tomorrow – Mon May 24 2021
For Monday the S&P continues to face declining volumes and a lack of consistent buying. That is impacting momentum which is readily seen in the continuing decline in momentum. With momentum declining, the index has a good chance to see a choppy day of trading on Monday.
Meanwhile other indicators are mixed with MACD losing some strength to the down signal, the Slow Stochastic showing an up signal and the Ultimate Oscillator falling while the Relative Strength Index (RSI) is signaling little change ahead but the Rate Of Change holding out some hope prices will move higher. This mixed outlook means another choppy day of trading for Monday with a slight bias to the upside by the close.
A lot will depend again on Bitcoin. The decline over the weekend may see the index start the day Monday, with a lower open. At present the dips are still opportunities to setup trades but volumes must improve and buying needs to increase, otherwise the index will slip lower again this week.
Monday looks very choppy with dips that could be deeper than expected but there is still hope for a positive close.
Stock Market Outlook Archives
Stock Market Outlook For Wed May 6 2026 – Choppy But Higher Still
Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
