Stock Market Outlook for Tue Jun 8 2021 – Weakness But The Bias Is Still Higher

Stock Market Outlook - Weakness But Higher

Monday ended up another sideways day despite a bounce at the open that brought the index to within 6 points of the all-time high.

By the end of the day, the index was down 3 points and closed at 4226. The 4216 level was constantly being tested on Monday.

The NASDAQ closed at 13881 up 67 points on the day.


Stock Market Outlook Chart Comments At The Close on Mon Jun 7 2021 

The SPX ended the day virtually flat and left behind a bearish candlestick for Tuesday.

The Lower Bollinger Band continued to slowly fall while the Upper Bollinger Band is moving higher. Both are bullish signals.

The 21 day moving average is climbing as are the 50, 100 and 200 day moving averages. These are bullish signals.

The SPX chart on Monday had just a bearish candlestick as the only negative signal for Tuesday.

Stock Market Outlook review of Mon Jun 7 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is unchanged 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 Friday May 28 2021. On Monday 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.

  • 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 for Tuesday 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 falling.

  • 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.

  • 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:

4250 is resistance

4225 is resistance

4200 is resistance

4150 is light support

4100 is light support

4070 is very light support

4050 is light support and where the 50 day is currently residing. This would represent a 4.4% decline.

4000 is good support

3900 is support and just below the 100 day moving average.

3850 is support

3800 is support

3750 is good support

3700 is light support and just below the 200 day moving average.

3680 is light support

3600 is strong support


 Stock Market Outlook for Tomorrow – Tue Jun 8 2021 

The technical signals on Monday by the close were rather mixed. The Rate Of Change and the Relative Strength Index (RSI) were both falling while the Moving Average Convergence / Divergence was stronger and the Ultimate Oscillator and Slow Stochastic are both pointing higher.

While this is a mixed outlook for Tuesday with some weakness notable, there is still a bias to the upside. The index should close higher on Tuesday but the day will be another choppy, sideways session, with the bias to the upside.


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