Monday saw the S&P open below the 3100 level, fall to 3080 within 10 minutes of the open and then begin to climb. By the end of the day the index had climbed back to 3117 near the highs of the day. This marked a gain of 20 points for the day.
Stock Market Outlook Chart Comments At The Close on Mon Jun 22 2020
The Bollinger Bands Squeeze is ending with the candlesticks each of the last 5 days holding above the 21 day moving average but below the Upper Bollinger Band. The Lower Bollinger Band is turning lower which should end the Bollinger Bands Squeeze. The closing candlestick on Monday is bullish for Tuesday.
There are now 4 up signals in place and the 50 day moving average is nearing the 200 and 100 day moving averages. Once it moves above those two moving averages, it will signal an end to the February-March sell-off.
Overall the index is more bullish than bearish but is having trouble moving much higher.
Stock Market Outlook review of Mon Jun 22 2020
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and negative again on Monday.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Friday June 12. The down signal was still strong 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 is falling but still positive.
- 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 weak down signal in place for Tuesday.
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 slightly.
- 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 slightly.
- 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:
3200 is resistance
3150 is resistance
3050 is support
3000 is support
2975 is light support
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
2100 is light support
2000 is good support and marks a drop of 1393 points for a 41% correction. Some analysts still believe the index will fall this low in the second half of 2020.
Stock Market Outlook for Tomorrow – Tue Jun 23 2020
For Tuesday we are looking at similar signals that started the day on Monday. Overall the technical indicators are still showing some signs of weakness with more a sideways pattern than actual up or down signal.
On Tuesday we should see some dips again but overall the index remains stuck trying to climb back to 3200 but facing a slew of sellers in the push still higher.
The stock market continues to need another catalyst to push higher. For now there is no new catalyst yet. Tuesday should see more sideways action which could end the day slightly higher or lower. The technical indicators are somewhat mixed but the bias is tilted toward a slightly positive close.
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