Wednesday saw stocks attempt a bounce which failed as the 10 year Treasury rose slightly and the debt ceiling concern was not resolved. The final half hour was particularly brutal with all the day’s rally given back into the close. But the SPX managed to close up 6.83 points to 4359 in a day that saw lower volume and less volatility. Let’s review the closing technical indicators from Wednesday to see what they tell investors to expect for Thursday.
Stock Market Outlook Chart Comments At The Close on Wed Sep 29 2021
On Wednesday, the index rallied to an intraday high of 4385 twice and both times fell back to below 4356. This left behind a neutral candlestick for Thursday which often points to a bounce the following day. The candlestick is back, just above the 100 day moving average where it ended the day on Tuesday.
The 21 day moving average continues to fall and could cross below the 50 day this week which will be another down signal.
The Upper Bollinger Band is continuing to trend sideways while the Lower Bollinger Band is falling and has reached the 100 day. This is bearish.
The 100 and 200 day moving averages are still climbing which is bullish..
For Thursday there are more bearish signals than bullish but there are strong indicators of a potential second bounce attempt on Thursday.
Stock Market Outlook review of Wed Sep 29 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and staying negative.
- 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 gained more strength but is also 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 falling and negative.
- 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 a down signal in place.
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 back above oversold signals.
- 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 falling sharply and at levels which normally see the market bounce.
- 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 30 2021
For Thursday the index is being supported by a number of oversold signals that also point to a potential for a second bounce attempt.
Often a second bounce will move the market back higher and set it up for more upside.
Thursday should see such a bounce and a higher close.
Stock Market Outlook Archives
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