For Friday Nov 22 2019 the markets opened higher as expected and then pulled back falling to 3100. Buyers stepped in and pushed back but the morning opening higher was or recovered. Despite this, the close was still higher on Friday with the S&P ending Friday at 3110 down just 3 points from the early morning high.
Stock Market Outlook Chart Comments At The Close on Thu Nov 21 2019
The SPX chart is still bullish, but there are further signs of weakness in the chart. The Upper Bollinger Band is continuing to turn back down and the Lower Bollinger Band is rising which could be setting up for a Bollinger Bands Squeeze later this week.
The closing candlestick on Friday was bearish for Monday.
All the remaining signals are still bullish.
3030 is still light support. All the major moving averages are still climbing including the 50 and 21 day moving averages. The 21 day moving average is still rising above the 3030 level which is bullish. The 50 day is above the 3000 level which is also bullish and is nearing the 3030 level.
As explained over the past two days, we should normally expect a dip or a couple of negative closes as the 50 day approaching this support level. This is common.
The Lower Bollinger Band has moved above the 100 day moving average and is now moving above the 50 day moving average which is bullish.
The 100 and 200 day moving averages are still rising.
The two buy signals from September are still in place.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and falling.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on ThursdayNov 21 2019. On Friday, the down signal was confirmed.
- 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 and not overbought.
- 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 is no longer overbought and has a down 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 falling which indicates lower prices should be expected.
- 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:
3100 is resistance
3030 is light support
3000 is support
2960 is light support
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
Stock Market Outlook for Tomorrow – Mon Nov 25 2019
The technical indicators are continuing to signal more weakness but the overbought signals are disppearing and in most instances, are gone. This leaves room for a potential bounce back for the index.
MACD confirmed Thursday’s down signal so we should be prepared for some negative days this week, especially as investors near Thursday’s holiday and Friday’s half day.
Despite all the signs of weakness, Monday still looks set to open higher, dip and then push to positive closing. Whether the index can make a new all-time high, is questionable but there is enough strength to move the index higher for another positive close on monday.