Wednesday’s market saw mild losses again but the index intraday reached the 21 day moving average and bounced off it.
The S&P ended the day down 6 points at 4514. The NASDAQ fell 87 points. The S&P during the day fell below the 4500 valuation which will set up for another dip on Thursday below 4500.
Let’s review the technical readings from Wednesday’s close and see what to expect for Thursday.
Stock Market Outlook Chart Comments At The Close on Wed Sep 8 2021
The Lower Bollinger Band is climbing higher which is bearish. The Upper Bollinger Band is still rising, which is bullish.
The closing candlestick on Wednesday is often indicative of a bounce coming.
All the major moving averages are still climbing which is also bullish. For Thursday the SPX chart remains bullish despite the Lower Bollinger Band.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling 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 Fri Aug 27. The up signal was gone on Wednesday and a neutral signal was issued.
- 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.
- 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 and is 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 falling.
- 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 unchanged.
- 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
3700 is light support
3680 is light support
3600 is strong support
Stock Market Outlook for Tomorrow – Thu Sep 9 2021
For Thursday Sep 9, the technical indicators are indicating investors should prepare for further downside action.
The break below 4500 on Wednesday will set the index up for a second dip below it on Thursday. The Rate Of Change however is indicating that a deeper move is not expected on Thursday.
The Moving Average Convergence / Divergence signal has turned neutral from pointing higher which is bearish for today. Overall the indicators are a lot weaker for Thursday but the closing candlestick often signals that a bounce is imminent.
Thursday then will be weak but with a potential for a bounce. There is little support in the index until 4475. That means a dip below 4490, 4485 or even 4480 could easily occur but watch for a bounce at some point during the day.
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