Wednesday was all about the Fed and the decision to continue to hold interest rates at near zero levels while indicating tapering is still a slow process. Bank stocks rose along with the bulk of the market. 75% of all New York stocks were rising along with 65% of all NASDAQ stocks. The rise was broad and drew in more buyers. Volume rose to 4 billion on New York and 4.3 billion on the NASDAQ. It was a good day. Let’s look at the closing technicals from Wednesday’s close to see what is in-store for Thursday.
Stock Market Outlook Chart Comments At The Close on Wed Sep 22 2021
On Wednesday, the index traded the entire day above the Lower Bollinger Band which is bullish. It still closed below Monday’s open however which remains bearish.
The Upper Bollinger Band is rising which is bullish. The closing candlestick on Wednesday is bullish and points to a potential continuation of Wednesday’s bounce although a bit more subdued.
The 21 and 50 day moving averages are continuing to dip lower which is bearish.
Only the 100 and 200 day moving averages are climbing. For Thursday there are an equal number of bullish and bearish signals. The closing candlestick may hold the strongest signal as it points to a further advance for Thursday.
Stock Market Outlook review Wed Sep 22 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative. It is still oversold.
- 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 some of its strength and remains 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 dipping lower but not signaling oversold 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 has an up signal in place and is moving out of 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 leaving oversold 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 signaling little change in pricing should be expected for Thursday.
- 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 light support
4450 is light support
4400 is good support
4370 is good 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
4070 is light support
4050 is light support
4000 is good support
3900 is support
3850 is support
3800 is support
3750 is good support
Stock Market Outlook for Tomorrow – Thu Sep 23 2021
For Thursday investors should be more willing to risk capital again following an upbeat Fed report that basically indicates the Fed still has the “back of the market”. With that safety net still in play, any weakness on Thursday is an opportunity to setup more trades as the outlook has shifted to up.
The outlook for Wednesday had been for the index to close around the 4390 level. It closed slightly higher at 4395. On Thursday we could see the index end the day around the 4425 level which had been light support before the sell-off. With many stocks still down more than 10% from their respective highs and indeed, many trading below their 50 day moving average, there is enough room to the upside to draw in investors. Thursday will end higher.
Stock Market Outlook Archives
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