On Wednesday investors continued to sell out of positions and the S&P lost 1.16% to end the day at 3567.79, closing below the important 3600 level. Selling was particularly strong in the final half hour.
Stock Market Outlook Chart Comments At The Close on Wed Nov 18 2020
Wednesday saw the index close below the 3600 level. The closing candlestick is bearish for Thursday.
The Upper Bollinger Band continues to climb above SPX 3600 closing around 3675 on Wednesday. The Lower Bollinger Band is falling but has now turned sideways. If it turns back up, the market will probably dip lower.
The 21 day, 50 day, 100 day and 200 day moving averages are all rising, a bullish sign. The up signal from Oct 21 is still in play, and the chart remains bullish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling 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 Nov 5. On Wednesday the up signal was weaker for a second straight day.
- 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.
- 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 weak 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 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 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:
3600 is resistance
3550 is resistance
3500 is support
3450 is support
3400 is support
3375 is support
3300 is support
3275 is support
3200 is support
3150 is support
3050 is support
3000 is support
Stock Market Outlook for Tomorrow – Thu Nov 19 2020
The closing candlestick on Wednesday often signals a drop to start the day but then a bounce attempt.
MACD has lost a lot of strength but it is still pointing higher for stocks. The Rate Of Change is falling which normally indicates we should not expect a great deal of change in prices today.
Overall then, weakness has set in but so far it is still an opportunity to setup more trades when dips occur.
A lower close is likely for Thursday but there is still the chance of a slightly positive close on the day.