New from Moderna regarding their vaccine results shot markets higher, leaving the S&P at a new all-time high of 3627.
Stock Market Outlook Chart Comments At The Close on Mon Nov 16 2020
Monday saw the index close above the 3600 level ending the day at a record high. The closing candlestick is bullish for Tuesday and signals the market is overbought and could slip on Tuesday.
The Upper Bollinger Band continues to climb above SPX 3600 and the Lower Bollinger Band is falling further indicating there is more upside ahead. The 21 day, 50 day, 100 and 200 day moving averages are all rising, a bullish sign. The 200 day moving average is rising toward the Lower Bollinger Band. If it crosses above it, it will be another bullish signal.
The up signal from Oct 21 is still in play, and the chart remains bullish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is trending sideways 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 Nov 5. 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 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.
- 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.
- 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:
3600 is resistance
3550 is resistance
3500 is support
3450 is support
3400 is support
3375 is support
3300 is support
3275 is support
3200 is support
3150 is support
3050 is support
3000 is support
Stock Market Outlook for Tomorrow – Tue Nov 17 2020
The index will dip back on Tuesday as much of the market is overbought. The technical indicators are all pointing higher and moving into overbought readings. After Monday’s big advance some weakness and dips should be expected.
The close however should see stocks regain their rally and move to another new closing high.