Friday saw a strong end of the week rally which recovered 33 points for the best one day gain since Oct 28 when the SPX rose 44 points. The rally managed to trim the loss for the week to just 14 points and left the S&P at 4682 within easy reach of the 52 week high.
The NASDAQ rose 156 points on good volume to end the week at 15,860, down just 110 points for the week.
Let’s review Friday’s closing technical indicators to see what’s in-store for the start of the third week of November. Historically the second half of November is stronger than the first half.
Stock Market Outlook Chart Comments At The Close on Fri Nov 12 2021
The index closed below the Upper Bollinger Band and left behind a bearish candlestick for Monday. The candlestick is still indicating the S&P will test the 21 day moving average shortly.
The Upper Bollinger Band is turning lower while the Lower Bollinger Band is rising and is now nearing the 50 day moving average after rising about the 100 day. This is bearish and investors could see a Bollinger Bands Squeeze this week.
The 21, 50, 100 and 200 day moving averages are all climbing. This is bullish.
For Monday the chart is more bearish than bullish for a third trading day.
Stock Market Outlook review of Nov 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 Wed Oct 13 2021 . On Friday the up signal lost more strength and could issue a down signal as early as Monday or Tuesday unless the SPX can start to climb higher.
- 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 a down signal in place which looks set to possibly turn into an up signal.
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 falling.
- 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:
4700 is resistance
4655 is resistance
4600 is resistance
4550 is light support
4525 is light support
4500 is support
4490 is support
4475 is support
4450 is support
4400 is support
4370 is light support
4350 is light support
4300 is light support
Stock Market Outlook for Tomorrow – Mon Nov 15 2021
For Monday the technical indicators are split but still show some strength with three rising, one ready to turn higher (Slow Stochastic) and one falling (Rate Of Change). The Moving Average Convergence / Divergence has lost almost all the up signal and is ready to issue a new down signal.
However for Monday there are still enough signs to point to a higher close. That said, there will be some dips according to the Rate Of Change but none should be extremely deep. A lot of the action higher on Monday will depend on buyers who are still chasing those stocks that have room to climb.
This week investors get retail earnings from a number of big cap names. Monday should move higher ahead of the start of retail earnings. Once the retail earnings start to be announced this week, the index could surprise with another move higher.
The second half of November has a history or rallying strongly. If retail sales beat estimates his week, we should see higher closes.
Stock Market Outlook Archives
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