On Monday, investors reacted to the better than anticipated March unemployment report and pushed all 3 indexes higher. The S&P made another new closing high of 4077 up an impressive 58 points but leaving the index overbought.
Stock Market Outlook Chart Comments At The Close on Mon Apr 5 2021
The Upper Bollinger Band is continuing to rise and the index closed just above it signaling overbought. This left behind a bullish and overbought candlestick for Tuesday.
The Lower Bollinger Band is rising but well below the 50 and 21 day moving average which is bullish at present.
The 21 day moving average is climbing higher away from the 50 day moving average which is bullish.
The 50, 100 and 200 day moving averages are all climbing higher.
Overall the S&P chart is very bullish and signaling overbought.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising 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 Monday March 29 2021. On Tuesday the up signal was stronger.
- 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 and overbought.
- 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 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 and overbought.
- 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 rising and signaling higher prices are ahead.
- 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:
4050 is light support
4000 is Support
3900 is support and the 50 day is just below this.
3850 is support
3800 is support
3750 is good support and the 100 day is just above this level
3700 is light support
3680 is light support – The 100 day moving average is at this valuation.
3600 is strong support and the 200 day is at this level.
Stock Market Outlook for Tomorrow – Tue Apr 6 2021
For Tuesday April 6 the technical indicators are all signaling the market is overbought. The Rate Of Change is signaling higher prices are still ahead.
We should see dips on Tuesday that will quickly find buyers. The market, despite being overbought, is finding ready buyers everywhere who are pushing stocks still higher.
Tuesday will see a higher close.