Monday saw a new all-time intraday high and a new closing higher for the S&P. It also saw a very boring day with the index tightly range bound to within 14 points from the day’s low to the day’s high. Despite this, volume rose and investors were snapping up stocks.
Stock Market Outlook Chart Comments At The Close on Mon Oct 28 2019
The SPX chart is bullish and closed above 3000 again. The Upper Bollinger Band is rising and the Lower Bollinger Band is falling, indicating more upside lies ahead for the index.
Despite the tight trading range on Monday, the closing candlestick is bullish for Tuesday.
All the major moving averages are climbing including the 50 and 21 day moving averages.
The two buy signals from September are still in place.
The 200 day moving average is now above the Lower Bollinger Band which is a bullish signal.
Stock Market Outlook review of Mon Oct 28 2019
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and rising.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tue Oct 15 2019. The up signal was stronger on Monday.
- 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 but unchanged or sideways from Friday.
- 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 weak up signal in place and is 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 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 indicating higher prices are expected.
- 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:
3000 is resistance
2960 is light support
2950 was light support
2900 is light support
2860 is light support
2840 is 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.
Stock Market Outlook for Tomorrow – Tue Oct 29 2019
In the support and resistance numbers, 3000 is still resistance. It will take a few dips back to establish whether 3000 will become support for the index. At present, it is still resistance.
Monday by the close saw much stronger technical indicators. Again there are no indicators pointing to a possible move back down for the index. Instead, all the indicators are pointing to further upside for the S&P.
Tuesday could see some weakness in the morning thanks to Alphabet releasing poor earnings numbers. But any dip in the stock on Tuesday will be seen as a buying opportunity. Within a week or possibly even less, we will see the stock recovered as investors will have forgotten the earnings numbers. Amazon is an excellent example of this bull market. The stock rose today and is back just $3.00 below where it closed on Thursday before earnings plunged the stock on Friday morning. These are signs there is more upside ahead for stocks.
Tuesday may see another day of a tight trading range, but the close will be higher again.
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