On Thursday investors spent the day in a roller coaster market which ended the day with a gain of 17 points for half a percent. The S&P closed at 3380 on Thursday.
This evening news of President Trump and the First Lady testing positive for covid-19 has the futures down fairly big. While that will be the major catalyst on Friday for market action, both down and up, I have included below the technical outlook as well.
Stock Market Outlook Chart Comments At The Close on Thu Oct 1 2020
On Thursday the index moved higher and managed to close above the important 50 and 21 day moving averages. However the action was reasonably negative which left a potential reversal candlestick for Friday.
The Upper Bollinger Band is still falling lower which is bearish. As well, note that the Lower Bollinger Band is starting to rise. We could see a Bollinger Bands Squeeze next week.
The 21 day is continuing is now at the 50 day moving average. A move below it will be a down signal. That will happen on Friday.
Thursday was the first day that the index moved back above the 21 day moving average in 17 straight days. We will probably see the index close back below both the 21 and 50 day moving averages on Friday.
The 200 day moving average is still climbing but the 100 is starting to turn lower. There are still 6 up signals and three down signals. The SPX chart is bearish.
Stock Market Outlook review of Thu Oct 1 2020
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 a down signal on Sep 4. On Thursday MACD issued a new up signal that has yet to be 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 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 has changed to sideways.
- 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 – Fri Oct 2 2020
Friday promises to be highly volatile. At 8:30 the jobs numbers are released. They are expected to show continued improvement in the economy. Meanwhile the news of President Trump and the First Lady testing positive for Covid-19 will mean a negative opening and a lower day for Friday.
Technical signals are a bit more positive but the big concern is the 21 day falling below the 50 day moving average and the probable Bollinger Bands Squeeze forming up. Neither is positive for the index. Next week we could see further negative days.
Stock Market Outlook Archives
Stock Market Outlook For Wed May 6 2026 – Choppy But Higher Still
Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
