Wed Nov 4 2020 saw a third day of rallying as investors continued with the relief rally that started on Monday. The S&P climbed 74 points for the biggest gain of the rally, closing at 3443.
Many analysts believe the rally underway is a result of investors believing the Senate will stay Republican and the House will stay Democrat. This split in governing powers many analysts believe mean the more radical agenda of some Democrats will be more difficult if not impossible to pass.
Stock Market Outlook Chart Comments At The Close on Wed Nov 4 2020
Wednesday’s rally was stronger than Tuesday’s pushing the index above the 50 and 21 day moving averages. This left behind a bullish candlestick for Thursday.
The Upper Bollinger Band is still rising and the Lower Bollinger Band is starting to turn up as well. The 21 day moving average and 50 day are also turning higher as are the 100 and 200 day moving averages.
The up signal from Oct 21 is still in play, and the chart has turned back to bullish although the rally has been strong and normally we should expect a dip after 3 strong rally days.
Stock Market Outlook review of Wed Nov 4 2020
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 a down signal on Oct 25. On Wednesday the down signal was weaker and is not oversold.
- 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 and is no longer oversold.
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 and nearing overbought readings.
- 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 which normally means we should expect prices to be higher.
- 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
3500 is resistance
3450 is resistance
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 5 2020
The only concern on Wednesday was the advancing share volume was lower than the decliners. Often this indicates that the rally is being used by investors to unload shares and raise cash levels. The might signal that many investors believe this is just a relief rally spike and the index will dip back shortly. Definitely on Thursday there were signs of investors rushing to get into a rally that is already 3 days old and has recovered much of the most recent correction.
On Thursday we should expect a choppy day and there is a good chance for dips. The close though should still be higher.
Stock Market Outlook Archives
Stock Market Outlook For Wed May 6 2026 – Choppy But Higher Still
Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
