Friday saw the Dow and S&P make new all-time highs. The S&P though, then ran out of steam and the rally faltered.
By the close the S&P was flat on the day, ending lower by a single point.
For the week though the Dow and S&P had one of the best September weeks in years and the Dow had its best week since July.
Stock Market Outlook Chart Comments At The Close on Fri Sep 21 2018
The S&P ended the day at the Upper Bollinger Band. The closing candlestick is bearish for Monday. Remember that on Wednesday the closing candlestick warned of a down day coming soon. That could have been Friday.
The 21 day moving average is continuing to climb and the index is staying above it which is bullish.
The Lower Bollinger Band continued above the 50 day moving average which is bearish at present but the Upper Bollinger Band is still turning higher which negates the bullish Lower Bollinger Band signal at present.
There are though signs that that market could slip into a Bollinger Bands Squeeze this week so that needs to be watched.
All the major moving averages are continuing to climb. Overall the S&P chart looks bullish for Monday.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and sideways.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thursday Sep 20. That signal was confirmed on Friday Sep 21.
- 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 positive and 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 issued an up signal for Monday 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 is moving sideways into Monday.
- 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 moving sideways into Monday.
- 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 I 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 Sep 24 2018
For Monday there are no down signals aside from the bearish closing candlestick.
The weakness in the market is seen in the number of technical signals that are pointing sideways.
However MACD has now a confirmed up signal in place.
What we are seeing if probably an overbought market that has some work to do to consolidate gains before moving higher.
Monday looks lower or at least sideways for stocks.
If you look at the support levels to be aware of section, you can see there is no support above 2860 with any degree of strength, so the index has some work to do to build support. That could end up seeing the final week of September stay choppy.
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