Market action on Friday centered on news that a trade deal, or partial deal was struck with China. This pushed the indexes higher although they did close off the best highs of the day. Nonetheless it was a strongly positive day which ended the second week of October with a positive close.
Stock Market Outlook Chart Comments At The Close on Fri Oct 11 2019
The 21 day moving average is now down below the 2960 level and is showing no signs that it will not continue to fall further, however the candlestick closed above the 21 day and left behind a long head. Often this signals a down day coming but for now the candlestick is bullish for Monday.
The Lower Bollinger Bands is sideways but the Upper Bollinger Band is turning down. This is bearish but the move higher on Friday may be enough to push the Upper Bollinger Band back to up.
The 50 day moving average is still falling and could fall below the 100 day early this week. If it fails to do so, it will be a very bullish signal.
The 100 day moving average is back moving sideways. Only the 200 day moving average is still climbing.
The two buy signals from September are still in place.
The S&P chart is mixed but is holding a strong up bias.
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 down signal on Fri Sep 27 2019. The down signal was weaker on Friday but still present.
- 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 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 strong 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.
- 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.
- 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:
3000 is resistance
2960 is resistance
2950 was light support
2900 is light support
2860 is light support
2840 is support
2800 is strong support
2795 is light support
2745 to 2750 is light support
2725 is light support
2700 is light support
2675 is light support
2650 is support
2625 is light support
2600 is support.
Stock Market Outlook for Tomorrow – Mon Oct 14 2019
The technical indicators improved dramatically on Friday with the big move higher. Only two indicators are still pointing lower while all the other indicators are showing renewed strength to the upside.
Friday saw a big move higher but the index closed well off the day’s high. We could see weakness Monday by mid-morning but the day should start positive. The close should be higher as investors will take advantage of any dips on Monday to add to positions.
Apple Stock and Microsoft Stock should move higher on Monday as well and may end up as leaders of Monday’s move up.
The week should see the S&P move above 3000 as long as there is no negative news on the trade deal with China.