Stock Market Outlook for Thu Sep 12 2019 – Overbought and Higher Still

Wednesday saw the market remain positive throughout the day.

The close was at the high for the day with the S&P ending the day at 3001.

With news that President Trump has delayed the tariffs planned for Oct 1 by two weeks, the futures for Thursday shows a higher open to start the day.

Here are the closing technical indicators on Wednesday and their outlook for Thursday.

Stock Market Outlook Chart Comments At The Close on Wed Sep 11 2019 

The 21 day moving average is continuing to climb as it pushes toward the 50 day.

The closing candlestick on Wednesday is bullish for Thursday.

The 50 day moving average is no longer falling. The 100 and 200 are climbing signaling further up side is ahead.

The S&P chart is more bullish heading into Thursday.

Stock Market Outlook review of Wed Sep 11 2019

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 Thurs Aug 29. The up signal was stronger on Wednesday.

• 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 positive and rising and and into overbought readings.

• 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 signal has an up signal in place and is very 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 and overbought.

• 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 indicating higher price lie ahead for stocks.

• 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:

3000 is resistance

2960 is good support

2950 is light support

2900 is light support

2860 is light support

2840 is 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.

 Stock Market Outlook for Tomorrow – Thu Sep 12 2019 

The market is overbought but overbought markets can last a while.

Wednesday shows no negative technical indicators heading into Thursday.

The test of 2960 on Tuesday set the index to push to 3000 today. The delay in tariffs adds that emotional element to help lift the market for Thursday.

The only wild card on Thursday is the Consumer Price Index which may not have as big an impact as many analysts believe. The chance it will change the Fed decision for next week is doubtful with just a few days before the Fed meeting and decision announcement.

Thursday will be basically an up day with a slight possibility of a morning dip if investors are a bit worried about the CPI numbers. It will only be a dip if there is one.

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