Wednesday’s market saw an early morning plunge which took the S&P down to 4290 which was still above Monday’s low of 4278 and Friday’s low of 4288. Those two are still the lowest points of the current correction. But buyers once more returned and by the end of the day the index is positive, up almost half a percent at 4363.55, back above the 4350 support level.
The NASDAQ rose just 68 points to close at 14,501.
Let’s review the closing technical indicators from the SPX on Wednesday to see what to expect for Thursday.
Stock Market Outlook Chart Comments At The Close on Wed Oct 6 2021
The market on Wednesday fell to the Lower Bollinger Band again but note how the Lower Bollinger Band is starting to turn sideways. This is bullish.
The index closed back above the 100 day moving average. This is bullish.
The closing candlestick is also bullish as it points to a higher day on Thursday although some selling is expected.
The Upper Bollinger Band is falling further which is bearish.
The 100 and 200 day moving averages are continuing to turn lower. This is bearish.
For Thursday there are three bullish signals. The index is becoming slightly more bullish although bearish signals are still dominant.
Stock Market Outlook review of Wed Oct 6 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and negative. Momentum has not been positive since Sep 8. This is a full month of negative momentum.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thu Sep 9. On Wednesday the down signal lost almost 30% of the down signal. This is somewhat bearish. It is still also signaling 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 and turned 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 rising from 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 away from being oversold.
- 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:
4550 is resistance
4525 is resistance
4500 is resistance
4490 is resistance
4475 is resistance
4450 is resistance
4400 is resistance
4370 is light support
4350 is light support
4300 is light support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
4175 is light support
4150 is light support
4100 is good support
Stock Market Outlook for Tomorrow – Thu Oct 7 2021
Wednesday saw the index close higher. Thursday should try to build on the uptrend in the early trading and then dip back. A drop down to 4320 is not unlikely but it will be an opportunity to buy SPY calls or setup trades in my opinion.
We should see the index move higher as the afternoon progresses and end the day higher. The technical indicators are pointing to further upside for Thursday and often, in the afternoon a day before the unemployment report is released the index moves higher. A close at or above 4370 on Thursday should be expected.
On Friday we get the September non-farm payroll numbers. These are anticipated to show the economy continuing to expand with more jobs added. I will be putting together a trade on Thursday ahead of the September unemployment report.
Stock Market Outlook Archives
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Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
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