Stock Market Outlook for Mon Nov 9 2020 – Election Rally Continues

The rally stalled on Friday as four days of rallying pushed the index into overbought signals.

Losses though were small with the S&P down just 1 point.

Stock Market Outlook Chart Comments At The Close on Fri Nov 6 2020

Friday say the index take a breather and investors take some profits. This left behind a bullish candlestick for Monday but also with some indecision for the start of the week.

The Upper Bollinger Band is still rising and the Lower Bollinger Band is still sideways. The 21 day moving average and 50 day are also turning higher as are the 100 and 200 day moving averages which is bullish.

The up signal from Oct 21 is still in play, and the chart remains bullish. To start the week, the index looks positioned to push toward the all-time highs.

Stock Market Outlook review of Fri Nov 6 2020

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. On Friday the up signal was strongly confirmed.

• 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 an up signal in place.

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 and overbought.

• 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 dipping lower.

• 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 resistance

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 9 2020 

For Monday the election rally from last week looks set to continue higher as news of Vice-President Biden announcing his win could soothe worried investors about the outcome of the election. Whether there are still further hurdles ahead on the eventual outcome, the weekend seemed to solidify the view for investors that the election as a question mark, is out-of-the-way. Normally this would lead to a rally on Monday.

The indexes are still overbought so it could be a bumpy day on Monday but a higher close is still expected. The Rate Of Change on Friday though, forecasts that investors shouldn’t expect a straight run higher to the all-time high. It forecasts a choppy day for Monday.

MACD on Friday issued a confirmed up signal. This has been a fairly accurate signal all year. To start the week then, the market looks positioned to move still higher.

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