Stock Market Outlook for Tue Apr 23 2019 – Sideways With Slight Bias Up

Mon Apr 22 2019 saw the S&P move in a very tight trading range closing higher by just 3 points for another day of sideways action.

Stock Market Outlook Chart Comments At The Close on Mon Apr 22 2019 

The S&P closed above the 21 day moving average and left behind another bearish candlestick. The index continues to churn sideways but gives no indication that it will fall. This is one of those periods when analysts advise, “don’t short a dull market”. Eventually though, if the index can’t climb on the back of better than expected earnings, it will pullback, especially as we enter the spring period which is among the weaker months for stocks.

The Bollinger Bands Squeeze has ended with the index moving higher but it continues to not fall lower but instead it is following the 100 and 200 day moving averages. Normally this is a bearish signal.

All major moving averages are back where they belong and the 50 day and 100 day are both moving away from the 200 day.

The S&P is stronger but the candlesticks are still advising caution for investors.

Stock Market Outlook review of Mon Apr 22 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and is 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 Tuesday April 2. MACD issued a weak down signal on Thursday and another weak down signal on Monday but neither is confirmed.

• 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 falling.

• 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 new 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 rising.

• 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 indicating lower prices are ahead of equities.

• 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 Resistance Levels To Be Aware Of:

2900 is strong resistance

2860 is light support

2830 is light 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.

There was good support at the 2550 level which is back to being support.

The 2500 level is support.

The S&P has light support at 2480 and better support at 2450.

There is good support at 2425.

Below that there is some support at 2400, 2380, 2350.

2300 has the most support at present but would represent a full correction of 641 points as a drop to this level would be 21% and just 5% away from a full bear market signal ending the bull market from 2009.

 Stock Market Outlook for Tomorrow – Tue Apr 23 2019 

The index continues to grind sideways and while investors continue to show no signs of wanting to sell out and move the index lower, there are many cautionary signals in the technical indicators and S&P chart again on Monday after the close.

For Tuesday there are no signals to suggest the index will finally break higher. 2900 has been very difficult to break through and move higher from. Tuesday looks very much the same, with a better chance of a slightly higher close, than a lower one, but overall the outlook is sideways.

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