Stock Market Outlook for Thu Apr 15 2021 – Potential Bounce But Lower Close

On Wed Apr 14 2021 the S&P and NASDAQ had a tougher day. Both indexes were moving higher in the early part of the day but then selling in the afternoon pushed stocks lower.

The S&P closed down near the lows of the day at 4124 for a loss of 17 points.

Let’s review Wednesday’s trading action to see what the technical indicators are advising for Thursday.

Stock Market Outlook Chart Comments At The Close on Wed Apr 14 2021 

The Upper Bollinger Band is continuing to rise which is bullish. The index on Wednesday closed just below the Upper Bollinger Band signaling the market remains overbought. This is the seventh overbought signal from the SPX chart and shows an extremely overbought index.

The Lower Bollinger Band is falling and could move below the 100 day which is bullish, on Thursday or Friday.

The closing candlestick on Wednesday is bearish for Thursday.

The 21 day moving average is climbing higher away further away from the 50 day moving average which is bullish.

The 50, 100 and 200 day moving averages are all climbing higher.

Overall the S&P chart is very bullish and signaling overbought for a seventh straight day.

Stock Market Outlook review of Wed Apr 14 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and trending sideways.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday March 29 2021. On Wednesday the up signal was weaker again.

• 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 falling and still signaling 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 has an down signal in place and is showing the index as extremely overbought.

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 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 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:

4100 is light support

4070 is very light support

4050 is light support

4000 is Support

3900 is support and the 50 day is just above this at 3933.

3850 is support

3800 is support and the 100 day is just above this level.

3750 is good support

3700 is light support

3680 is light support

3600 is strong support and the 200 day is just above this level.

 Stock Market Outlook for Tomorrow – Thu Apr 15 2021 

The index is still extremely overbought and technical indicators are still advising to watch for deeper dips than expected.

With the index just above 4120 the morning start could see a bounce attempt but the close could still see the index dip lower or close near flat.

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