Wednesday saw the SPX again struggling to break above the 4200 level. Intraday the index reached 4,217, just 21 points from the all-time high but, like yesterday, the index couldn’t build on the spike and fell back.
The release of the Fed’s Beige Book at 2:00 PM, kept the market soft leading up to the release of the minutes and then very choppy after the minutes were released.
By the end of the day the index closed at 4208 up just 6 points on the day.
Stock Market Outlook Chart Comments At The Close on Wed Jun 2 2021
The SPX ended the day up just 6 points but kept a bullish outlook for the candlesticks. The closing candlestick is bullish for Thursday.
The Lower Bollinger Band continued to slowly fall on Wednesday, another bullish signal.
This is the seventh straight day above the 21 day for the closing candlestick but the index is not rising much and that is a concern.
The 21 day moving average is back trying to rise along with the 50, 100 and 200.. The 50 day is moving closer to the 21 day which is a sign of weakness. If it gets closer still, we will see the index slip lower. If you look at the period from roughly March 17 to March 25 in the chart below you can see a similar scenario where the 50 day reached up to the 21 day and the index slipped back. It’s important to be aware of this, but it may not happen.
The chart is still mixed with a lot of the bullish signals but still a few warnings from the bears so it will be important to stay cautious at least until we get the May jobs numbers on Friday. That could be the deciding impetus to move stocks higher or lower and break the sideways pattern that has developed.
Stock Market Outlook review of Wed Jun 2 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 Friday May 28 2021. On Wednesday the up signal was stronger.
- 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 for Thursday 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 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:
4250 is resistance
4225 is resistance
4200 is resistance
4150 is light support
4100 is light support
4070 is very light support
4050 is light support and where the 50 day is currently residing. This would represent a 4.4% decline.
4000 is good support
3900 is support and just below the 100 day moving average.
3850 is support
3800 is support
3750 is good support
3700 is light support and just below the 200 day moving average.
3680 is light support
3600 is strong support
Stock Market Outlook for Tomorrow – Thu Jun 3 2021
Since the start of 2021, days when the technical indicators are all bullish have been followed by a down day. For Thursday, all the technical indicators except one, are bullish. The one signal pointing lower is the rate of change. That often means we will see a bit of weakness on Thursday.
Aside from that though, the technical indicators are signaling the index should be able to push higher on Thursday, but it will be primarily a sideways day, with an up bias still in place for the index. There may be limited movement on Thursday ahead of Friday’s release of May’s unemployment numbers. That in itself, could be the catalyst to break free of the sideways pattern in stocks and move higher.
Stock Market Outlook Archives
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Morning Investing Strategy Notes for Thu Apr 18 2024
Stock Market Outlook for Thu Apr 18 2024 – Deeply Oversold – Bounce Attempt Expected
Morning Investing Strategy Notes for Wed Apr 17 2024
Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt
Morning Investing Strategy Notes for Tue Apr 16 2024
Stock Market Outlook for Tue Apr 16 2024 – Deeply Oversold
Morning Investing Strategy Notes for Mon Apr 15 2024
Stock Market Outlook for Mon Apr 15 2024 – Expect A Bounce
Morning Investing Strategy Notes for Fri Apr 12 2024
Stock Market Outlook for Fri Apr 12 2024 – All About Bank Earnings
Morning Investing Strategy Notes for Thu Apr 11 2024
Stock Market Outlook for Thu Apr 11 2024 – Weakness and Lower
Morning Investing Strategy Notes for Wed Apr 10 2024
Stock Market Outlook for Wed Apr 10 2024 – All About The CPI Numbers
