Monday saw the index continue the advance as further positive vaccine news embolden investors further. The index closed up 20 points, recovering from an early morning dip to end the day at 3577.
Stock Market Outlook Chart Comments At The Close on Mon Nov 23 2020
Monday saw the index close below the 3600 level but above 3550. The closing candlestick is bullish for Tuesday.
The Upper Bollinger Band continues to climb above SPX 3600 closing around 3717 on Monday which is bullish. The Lower Bollinger Band is falling to the 200 day and if it falls below it, is also bullish.
The 21 day, 50 day, 100 day and 200 day moving averages are all rising, a bullish sign. The up signal from Oct 21 is still in play, and the chart remains bullish despite the selling last week.
Stock Market Outlook review of Mon Nov 23 2020
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling 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 weaker for a fifth straight day.
- 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 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 24 2020
For Tuesday the indexes are continuing to show weakness but with Relative Strength Index (RSI) and the Rate Of Change rising, we should see a positive day.
The main concern for Tuesday is the MACD indicator which has weakened considerably. It needs to begin to build strength again, otherwise the rally risks pulling back later this week or early next. For Tuesday though, the S&P should end the day higher.
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