Monday opened strongly for the indexes and then slipped almost from the start. A second rally attempt after 10:00 AM failed and the SPX moved sideways until shortly before 2:00 PM. When the index was unable to push higher, sellers stepped up and volume increased especially toward the last 20 minutes of trading. Despite the primarily sideways day, the S&P closed down just 5 points.
Stock Market Outlook Chart Comments At The Close on Mon Jun 24 2019
The index closed below the Upper Bollinger Band but only with a slight loss. The closing candlestick was bearish for Tuesday..
The upper Bollinger Band and the Lower Bollinger Band are still both moving away from each other. This normally indicates a larger move higher should be expected.
There is still one sell signal in play but the 21 day is still turning higher and should move above the 50 day this week which will negate the sell signal.
All the moving averages are climbing and the 200 day is almost ready to cross above the 2800 level which will be bullish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and falling indicating weakness for Tuesday.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thursday June 6. The up signal was strong again on Tuesday.
- 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 movie 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 signal has a down signal in place. The technical indicator is showing the market as extremely 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 falling and is 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 which indicates we could see some price changes shortly.
- 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:
2950 is resistance
2900 is light support
2860 is better 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.
Stock Market Outlook for Tomorrow – Tue Jun 25 2019
For Tuesday the technical indicators are showing the signs of being overbought.
There are sideways readings as well as some lower readings but none are strong enough to suggest anything more than another day of weakness and probably a slightly lower close.
The signal still show strength as soon as this period of weakness ends shortly.
Tuesday then is sideways with a slightly lower close but Wednesday should be higher.