Monday saw stocks build on Friday’s close as investors continued to focus on the reopening of the economy and the positive impact they expect to see on the economy.
Stock Market Outlook Chart Comments At The Close on Mon Jun 1 2020
The SPX chart has two new up signals on Monday. The first is the 21 days moving above the 100 day. The second is the 50 day rising and now above the Lower Bollinger Band. When combined with the May 1 up signal this is the third up signal for the S&P.
The index has now been above the 200 day moving average for 6 straight days which is bullish again.
The closing candlestick on Monday was bullish for Tuesday.
Stock Market Outlook review of Mon Jun 1 2020
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum has turned sideways (unchanged) but remains 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 Tuesday May 19. The up signal was stronger on Monday.
- 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 also trending sideways.
- 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 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 also rising indicating prices should see a change on Tuesday.
- 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:
3050 is resistance
3000 is strong resistance
2950 is light support
2900 is light support
2860 is light support
2840 is light support
2800 is good support
2725 is light support
2700 is light support and marked a drop of 20.4%.
2675 is light resistant
2650 is light support
2625 is light support
2600 is support
2550 is light support
2500 was good support and marked a correction of 26.3%
2344 is the next level of support and marks a 30.9% correction.
2191 was the market low on March 23 and most analysts believe this is the low point we will see.
2100 is light support
2000 is good support and marks a drop of 1393 points for a 41% correction. Some analysts believe the index will fall this low before the bear market ends.
Stock Market Outlook for Tomorrow – Tue Jun 2 2020
For Tue Jun 2 2020 stocks are overbought and trying to push higher. With new up signals on Monday by the close, the index should be able to push still higher.
Also noted are overbought signals, which are registered with a number of the technical indicators. This means we will see some weakness on Tuesday. Confirming this is a down signal from the Slow Stochastic for Tuesday.
Therefore we will see a dip or two on Tuesday. The end of the day however should still be higher.
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