Stock Market Outlook for Mon Nov 23 2020 – Sideways With Bias Up

The outlook for the S&P on Friday was mixed with a stronger case for a negative day than a positive one. However most important was that the bullishness is still intact and it won’t take much to see the index pop back above 3600.

Let’s look at Friday’s close to see how the week will may start.

Stock Market Outlook Chart Comments At The Close on Fri Nov 20 2020 

Friday saw the index close below the 3600 level but above 35550.  The closing candlestick is bearish for Monday.

The Upper Bollinger Band continues to climb above SPX 3600 closing around 3700 on Friday which is bullish.  The Lower Bollinger Band is falling and may fall below the 200 day moving average on Monday.

The 21 day, 50 day, 100 day and 200 day moving averages are all rising, a bullish sign. The up signal from Oct 21 is still in play, and the chart remains bullish despite the selling last week.

Stock Market Outlook review of Fri Nov 20 2020

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling 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 Nov 5. On Friday the up signal was weaker for a fourth straight day.

• 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 a down signal in place and is overbought.

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 falling.

• 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:

3600 is resistance

3550 is resistance

3500 is support

3450 is support

3400 is support

3375 is support

3300 is support

3275 is support

3200 is support

3150 is support

3050 is support

3000 is support

 Stock Market Outlook for Tomorrow – Mon Nov 23 2020 

The selling last week was on low volume which usually indicates investors are not concerned and are continuing to hold their positions, as they wait or higher prices.

There could be some weakness during the day on Monday but look for the morning to try to pop higher to start the week.

The close on Monday could be slightly higher but any positive news on a stimulus package will send stock higher.

Bias is holding to the upside for Monday although most of the outlook remains sideways to start the week.

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