Friday saw continued weakness with volumes increasing and more stocks slipping. The SPX Index managed to close above 2960 but just by two points.
Stock Market Outlook Chart Comments At The Close on Fri Sep 27 2019
The 21 day moving average is continuing to climb which is bullish.
The closing candlestick was below the 21 day moving average and left behind another bearish candlestick. The 2960 level was reached and broken through on Friday which is bearish.
The 100 and 200 day moving averages are still climbing, as they continue to signal higher prices are ahead for stocks. The 50 day moving average is trending sideways which is bearish.
The S&P chart is somewhat bullish heading into Monday but the sideways pattern from last week broke Thursday and Friday and the index is not recovering the 3000 level which is also bearish.
The Lower Bollinger Band moved higher today and is above the 200 day. The Upper Bollinger Band is still falling. This could be the start of a Bollinger Bands Squeeze for this week.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and falling.
- 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. It is not a strong down signal but enough to warrant caution for investors as we head into October.
- 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 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 has a weak sell signal in place to start the week.
- 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.
- 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 also 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 and Resistance Levels To Be Aware Of:
3000 is resistance
2960 is good support
2950 is 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 Sep 30 2019
For Monday there is a good chance for a bounce in the indexes. That bounce though won’t hold and the indexes will close lower.
The technical indicators are all pointing to weakness and lower prices at present.