Stock Market Outlook for Thu Jan 21 2021 – Unconfirmed MACD Up Signal

Wed Jan 20 2021 saw all three indexes climb to new record higher. The S&P added in almost 53 points to close at 3851.85.

Buying was steady right from the open with only a slight dip lower in the final half hour of the day. The SPX closed just 8 points below the intraday high of 3859.

Stock Market Outlook Chart Comments At The Close on Wed Jan 20 2021 

On Wednesday the index closed at the Upper Bollinger Band after starting the day above the 3800 level. The closing candlestick was bullish for Thursday although there could be some selling in the early trading on Thursday as the index closed strongly just below the day’s high. Often this is followed by a weaker start to the next day.

The Bollinger Bands are back in bullish mode with the Upper Bollinger Band climbing and the Lower Bollinger Band turning down away from

The major moving averages are still rising and the up signal from Oct 21 is still in play (no longer shown in the chart). The chart is still bullish with no bearish signals

Stock Market Outlook review of Wed Jan 20 2021

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 an up signal on Dec 7. On Wednesday MACD turned back to another up signal. While unconfirmed, a move higher or even sideways on Thursday will turn this into a confirmed up signal. This will add strength to the Dec 7 up signal.

• 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 and back positive.

• 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 and is 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 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:

3800 is resistance

3750 is resistance

3700 is light support

3600 is strong support

3550 is support

3500 is strong support

3450 is support

3400 is support

3375 is support

3300 is strong support

3275 is support

3200 is support

3150 is support

3050 is support

3000 is strong support

 Stock Market Outlook for Tomorrow – Thu Jan 21 2021 

For Thursday, the technical indicators are all bullish. Normally we should expect some selling, usually in the morning near the open of trading, following Wednesday’s strong day. Overall though the new unconfirmed up signal from the MACD technical indicator, combined with the other up signals from the remaining technical indicators, points to Thursday as having another higher close.

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