On Wednesday investors were hopeful of a second stimulus bill and pushed the SPX to above the 50 day moving average but the final hour and a half of trading was volatile as the index fell to 3340 before climbing back to close at 3363, just above the 50 day moving average.
Stock Market Outlook Chart Comments At The Close on Wed Sep 30 2020
On Wednesday the index moved higher and managed to close above the important 50 day moving average. The closing candlestick was bullish for the first day of October.
The Upper Bollinger Band is still falling lower which is bearish. The Lower Bollinger Band however is continuing to hold the 3200 level which is neutral at present.
The 21 day is continuing to fall and is now at the 50 day moving average. A move below it will be a down signal.
The index has now been trading below the 21 day moving average for 17 straight (trading) days without being able to climb back above it. A move higher on Thursday should place the index back above the 21 day moving average.
The 100 and 200 day moving averages are still climbing. There are still 6 up signals and three down signals. The SPX chart is bearish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Sep 4. On Wednesday the down signal was weaker and could turn into an up signal shortly.
- 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.
- 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 an up 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 rising.
- 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:
3600 is resistance
3500 is resistance
3450 is resistance
3400 is resistance
3375 is resistance
3300 was support
3275 is support
3200 is support
3150 is support
3050 is support
3000 is support
2975 is light support
2950 is light support
2900 is light support
Stock Market Outlook for Tomorrow – Thu Oct 1 2020
On Thursday to start off the month of October and a the final quarter of the year, the technical signals are pointing to a higher close. The chart however is warning that there could be more downside shortly, especially if the stimulus bill fails to be passed. For Thursday though, the day will end higher and above the 21 day moving average.