Stock Market Outlook for Tue Dec 10 2019 – Back To Weakness

Monday saw weakness creep back into the markets. All 3 indexes ended the day lower however losses were mild as many investors took selective profits.

Stock Market Outlook Chart Comments At The Close on Mon Dec 9 2019 

The SPX chart remains bullish, but the closing candlestick was bearish for Tuesday.

The 21 day moving average is back climbing which is bullish but the Bollinger Bands are now into a Bollinger Bands Squeeze which could be bearish or bullish. At present the outlook is for the index to break higher out of the squeeze.

Aside from the 21 day moving averages the remaining major moving averages are still climbing including the 50, 100 and 200 day moving averages.

Light support is at 3075 which was tested on Tuesday last week and was not tested further during the week.

Stock Market Outlook review of Mon Dec 9 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling but positive.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Mon Dec 2 2019. On Monday the sell signal was weaker.

• 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 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 strong up 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 moving lower.

• 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 higher prices are not expected.

• 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:

3150 is resistance

3075 is light support

3030 is light support

3000 is support

2960 is light support

2950 was light support

2900 is light support

2860 is light support

2840 is support

2800 is strong support

2795 is light support

2745 to 2750 is light support

2725 is light support

2700 is light support

 Stock Market Outlook for Tomorrow – Tue Dec 10 2019 

For Tuesday investors may focus on the impeachment charges by the Democrats and stocks may dip slightly again. Overall however the market remains bullish and it is only a matter of a short few days at most before the index resumes the uptrend. For Tuesday expect to see some further weakness.

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