Wednesday saw the pullback we were expecting following Tuesday’s bounce. Thursday now lies ahead and then the last trading day of March and the end of the first quarter which is definitely one for the record books.
Stock Market Outlook Chart Comments At The Close on Wed Mar 27 2019
All major moving averages are back where they below and the 50 day and 100 day are both moving away from the 200 day. The 50 day reached the Lower Bollinger Band today. If it crosses above it, normally that is a good sign for a move higher in the overall market.
The closing candlestick was bearish for Thursday, but if you look at the past 4 trading days you can see that the 21 day moving average has held the market up. Tonight’s candlestick sometimes indicates a bounce is coming since it is sitting on an important trend line.
The Bollinger Bands Squeeze continues and is still not showing which way the index will move out of the squeeze.
Stock Market Outlook review of Wed Mar 27 2019
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and falling.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Friday March 22 2019. The down signal gained more strength today.
- 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 unchanged.
- 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 a down signal in place for Thursday but it is weaker and as you can see in the chart, it does appear that it might be getting ready to move back to up..
- 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.
- 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 unchanged which is usually a signal that stock prices are not expected to climb or fall much on Thursday.
- 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 Resistance Levels To Be Aware Of:
2900 is strong resistance
2860 is resistance
2830 is light 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.
There was good support at the 2550 level which is back to being support.
The 2500 level is support.
The S&P has light support at 2480 and better support at 2450.
There is good support at 2425.
Below that there is some support at 2400, 2380, 2350.
2300 has the most support at present but would represent a full correction of 641 points as a drop to this level would be 21% and just 5% away from a full bear market signal ending the bull market from 2009.
Stock Market Outlook for Tomorrow – Thu Mar 28 2019
While the morning saw the rally that started the day, falter, the afternoon saw buyers push back against sellers and close all 3 indexes with only minor losses, despite the day seeing much steeper losses earlier on.
This continues to point to an underlying strength to the upside.
Thursday looks like a lower day should be expected but markets can fool even the most seasoned investor. We could get a jump back up on Thursday although at present the outlook remains for a choppy day and a lower close.
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Stock Market Outlook for Tue Apr 23 2024 – Bounce But Lower
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Stock Market Outlook for Mon Apr 22 2024 – No Change – Deeply Oversold Bounce Possible
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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