Stock Market Outlook for Thu Aug 29 2019 – Still Sideways With Bias Lower

The outlook for the index for Wednesday was sideways with a bias lower. The index though continued to climb despite the continued concerns of the inverted yield curve which many fear are warning of a recession. The move higher on Wednesday may change on Thursday. Let’s take a look at the technical indicators following the advance on Wednesday.

Stock Market Outlook Chart Comments At The Close on Wed Aug 28 2019 

The potential of a Bollinger Bands Squeeze continued to develop on Wednesday as the Upper Bollinger Band is falling rapidly.

The 21 day moving average is almost below 2900 which means it will fall below the 100 day issuing a second sell signal.

The closing candlestick is bullish for Thursday.

The 50 day moving average is still falling while the 100 day moving average which has been moving primarily sideways, is falling below the 2900 valuation. The 200 day moving average is still climbing.

Overall the index looks poor for Thursday yet again, but there are still some signals that are bullish so there is a chance of another push higher. Note though that each day the index keeps reaching for the 200 day moving average.

Stock Market Outlook review of Wed Aug 28 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising and back 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 Thursday July 18. On Wednesday the sell signal was weak.

• 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 negative and trying to rise.

• 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 weak 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 moving 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:

3000 is resistance

2960 is light resistance

2900 is light resistance

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 – Thu Aug 29 2019 

The technical indicators are still very poor for Thursday although there is some improvement. Overall I think the rally has been poor and each day the S&P has come close to the 200 day moving average.

I am staying cautious despite the index trying to move higher. I am still looking at the technical indicators as sideways with a bias lower.

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