Stock Market Outlook for Tue May 4 2021 – Weakness With A Negative Close

Stock Market Outlook - Weakness

On Monday the S&P rose 11 points in a choppy day of trading to end the day at 4192.66.


Stock Market Outlook Chart Comments At The Close on Mon May 3 2021 

The Upper Bollinger Band is falling and the Lower Bollinger Band is rising as a new Bollinger Bands Squeeze is in effect. At present the outlook for the squeeze is negative but that could easily change.

The closing candlestick on Monday is bearish for Tuesday.

The 21 day moving average is climbing higher, further away from the 50 day moving average which is bullish.

The 50, 100 and 200 day moving averages are all climbing higher.

Overall the S&P chart is bullish but as explained above there are bearish signals that are warning investors to stay cautious.

Stock Market Outlook review of Mon May 3 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is back positive and rising.

  • 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 April 30 2021. On Monday the signal lower 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 falling..

  • 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.

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.

  • 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:

4225 is resistance

4200 is resistance

4150 is light support

4100 is light support

4070 is very light support

4050 is light support

4000 is Support

3900 is support and the 50 day is just above this at 3933.

3850 is support

3800 is support and the 100 day is just above this level.

3750 is good support

3700 is light support

3680 is light support

3600 is strong support and the 200 day is just above this level.


 Stock Market Outlook for Tomorrow – Tue May 4 2021 

On Tuesday the index is facing a second bearish candlestick to start the day. The technical indicators are a bit more mixed for Tuesday with two indicators turning back up. The rest though continue to point to a weaker day.

On Tuesday expect dips with a better chance for a negative close.


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