Triple witching on Friday saw volatile markets with a bias to the downside. By the end of the day the S&P was down 40 points to 4432.99 and closing just below the 50 day moving average. This marked the lowest closed since Aug 19.
The NASDAQ fell 137 points and touch 15000 before closing at 15043. The 15,000 valuation has been difficult for the index to stay above.
Let’s review Friday’s closing technical signals to see what they advise investors should expected for Mon Sep 20 2021.
Stock Market Outlook Chart Comments At The Close on Fri Sep 17 2021
The Lower Bollinger Band is back rising while the Upper Bollinger Band is falling. Another Bollinger Bands Squeeze seems likely this week.
The index slipped to just below the 50 day Friday which left behind a bearish candlestick for Monday.
The 21 and 50 day moving averages are also dipping lower which is bearish.
Only the 100 and 200 day moving averages are climbing. For Monday there are now more bearish signals than bullish ones on the SPX chart.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and negative. It is showing oversold.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thu Sep 9. On Friday the down signal rose strongly.
- 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 slightly.
- 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 neutral signal in place and looks set to change to a down signal.
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 and moving back into oversold.
- 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 means we will see bigger swings in prices on Monday, 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:
4550 is resistance
4525 is resistance
4500 is resistance
4490 is resistance
4475 is light support
4450 is light support
4400 is good support
4370 is good support
4350 is light support
4300 is light support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
4175 is light support
4150 is light support
4100 is good support
4070 is light support
4050 is light support
4000 is good support
3900 is support
3850 is support
3800 is support
3750 is good support
Stock Market Outlook for Tomorrow – Mon Sep 20 2021
On Friday, the S&P broke through a number of technical support points. This left the index with just the 4400 a the next support level for the index.
The close on Friday generated stronger down signals. Monday will be choppy and while there is the potential for a bounce, Monday is expected to end the day lower.
The outlook for the start of the week is to stay cautious as the index is positioned to move lower.