Stock Market Outlook for Mon Sep 9 2019 – Choppy, Dips Likely But Higher

Friday saw the S&P end the day sideways with a slightly higher close by just under 3 points. The index ended the day at 2978.71, still above the important 2960 valuation.

Friday also marked the second straight week of gains in the index.

Stock Market Outlook Chart Comments At The Close on Fri Sep 9 2019

The potential of a Bollinger Bands Squeeze is ending as you can see the Upper Bollinger Band is now rising and the Lower Bollinger Band is falling.

The most significant event in the S&P chart was a new buy signal on Sep 5 as the 21 day moving average rose back above the 100 day moving average. This negates the Aug 29 sell signal.

The closing candlestick is neutral for Monday as sometimes this candlestick signals a reversal day coming up while other times it signals a continuation of the advance.

The 50 day moving average is still falling but the 100 day moving average is no longer slipping below the 2900 level.

The 200 day moving average is still trending sideways.

The S&P chart still looks better for Monday as the candlestick is above all the major moving averages and pushing the Upper Bollinger Band. This, and the buy signal, are among the best signs the chart has seen in weeks.

Stock Market Outlook review of Fri Sep 6 2019

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 an up signal on Thurs Aug 29. The up signal was stronger again 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 positive but falling indicating there will be weakness on Monday.

• 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 signal has a strong up signal in place for Monday but is also showing very overbought signals which could be advising that the index rally will slow.

• 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 and overbought.

• 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 turned sideways indicating that prices are not expected to change by much on 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 and Resistance Levels To Be Aware Of:

3000 is resistance

2960 is light resistance

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 9 2019 

The jobs numbers disappointed on Friday but investors took the weaker numbers as another reason for the Fed to cut rates next week.

For Monday, we will see some bigger dips and could see the 2960 or 2950 be tested. The index though should hold and the close should be flat to slightly higher.

The technical indicators are pointing to primarily a sideways day with little in the way of price increases for stocks. Sideways days help build strength for moves higher. We could be seeing such a move higher this week.

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