Friday saw the S&P turn primarily sideways and close flat by the end of the day.
The S&P was down by just 0.02 points to close at 2913.98. Intraday the S&P fell again below 2910, reaching 2907 before buyers returned and pushed the index back up.
The repeated selling down to below 2910 is finding buyers and that should push the index higher on Monday.
Stock Market Outlook Chart Comments At The Close on Fri Sep 28 2018
The S&P once again came close to the 21 day moving average but managed to recover and close above it. However you can see that the 21 day is now turning sideways and is no longer climbing.
This left behind a bearish candlestick for Monday. However this type of candlestick often is seen just before a bounce attempt.
All the other major moving averages are still climbing.
Note that the Lower Bollinger Band is falling back toward the 50 day moving average. If it falls below it and the Upper Bollinger Band starts to rise, it should signal a move higher for the index is at hand.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is still positive and moving sideways.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Wednesday Sep 26. The down signal is stronger on Friday.
- 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 signal is negative and moving sideways.
- 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 still has a weak down signal for Monday and is no longer 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 moving 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 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 Levels To Be Aware Of:
2860 is light support
2830 is light support
2795 is light support
2745 to 2750 is light support
2725 is light support.
2700 is support.
2675 is light support.
2650 is light support
2620 is light support
2600 is strong support.
There is good support at the 2550 level from where the market bounced back from the recent correction low on Feb 9.
The S&P has light support at 2480. It also has light support at 2450 and good support at 2425. Below that there is some support at 2400, 2380, 2350. 2300 has the most support at present but would represent a full correction as a drop to this level would be 20% and just 5% away from a potential bear market signal.
Stock Market Outlook for Tomorrow – Mon Oct 1 2018
The technical indicators are reaching a point where a bounce could be next for the S&P.
Monday will definitely see some selling and some dips but by the close the index should be higher.
Historically the first trading day of October has been higher for the index. History should repeat itself on Monday. Tuesday though, could be weaker. I will know more after the close on Monday.
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