Wednesday saw some weakness in the morning and then a rally to the Fed’s announcement at 2:00 PM. The decision to cut interest rates saw many investors “selling the news” as it were and the index fell lower and broke through 2990. Volume on the way down however was low which brought in buyers who pushed the index back to where the day had started.
Stock Market Outlook Chart Comments At The Close on Wed Sep 18 2019
The 21 day moving average is continuing to climb and should reach the 50 day this week and move above it. That will be a major up signal when it occurs. It will also negate the sell signal from Aug 16 which is still in effect.
The closing candlestick on Wednesday is bullish for Thursday.
The 50 day moving average is moving sideways. The 100 and 200 are climbing, signaling further upside is ahead.
The S&P chart is more bullish again, heading into Thursday.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and falling.
- 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 weaker again by the close 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 but moving sideways for a second day.
- 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 still has a down 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 has stopped falling and is moving sideways.
- 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 back falling which means prices may decline shortly.
- 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 19 2019
The morning looks like stocks will open weakor and may dip but they should recover and move higher.
There is a fair amount of weakness developing in the technical indicators which needs to be watched. The interest rate cut and the comments from Fed Chair Powell on Wednesday afternoon, should be enough to move the index higher.
Thursday will start with weakness but should end higher by the close.