Friday was a half day thanks to the Thanksgiving Day holiday.
All indexes climbed with the S&P up 8 points to close at 3638. For a half day, the volumes were not as low as in prior years. This could be due to many investors not traveling this Thanksgiving, due to Covid-19 concerns. With more investors at home, many took time to do a few trades and the volumes were historically higher this Thanksgiving half day.
Stock Market Outlook Chart Comments At The Close on Fri Nov 27 2020
Friday saw the index climb slightly but stay above 3600. The closing candlestick is typically bearish for the following trading day, but since Friday was a half day, it is questionable whether the candlestick can be trusted for Monday.
The Upper Bollinger Band turned sideways on Friday while the Lower Bollinger Band is climbing higher. We could see a change in trend shortly as often this move by the Lower Bollinger Band sets up the index for a potential Bollinger Bands Squeeze later this upcoming week or early next. This has to be watched to be determined how it will play out.
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 closing candlestick and change in the Bollinger Bands.
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 Nov 5. The up signal on Friday continued to lose strength.
- 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 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 has turned sideways.
- 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 which often signals a larger move could be coming, either up or down.
- 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 support
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 30 2020
For Monday, the final day of November, many investors will be taking some profits as the month has been one for the records. It would be rare to not see some selling to start or certainly in the morning on Monday.
The closing candlestick on Friday is pointing to a weak day to end the month. Historically the final trading day of November has been lower 13 of the last 21 years.
The technical indicators are still fairly strong but the Moving Average Convergence / Divergence keeps losing strength and the Relative Strength Index (RSI) is not climbing. Both of these could be pointing to some weak days coming up.
For Mon Nov 30 2020 expect to see some weakness especially in the morning and possibly in the close, but dips are still going to be bought. That means bigger dips, if we see one on Monday will find buyers. A weak day then is on tap for the end of November. Tomorrow though could start December higher. We will know more when the market closes on Monday.