Stock Market Outlook for Tue Sep 15 2020 – Choppy, Dips Likely But Higher Close

Monday’s market saw the anticipated bounce following the last week’s selling. All 3 indexes climbed including the S&P which reach 3383.54, up 1.2% on the day. The NASDAQ rose back above 11,000 closing at 11,056 with a gain of 203 points.

Stock Market Outlook Chart Comments At The Close on Mon Sep 14 2020 

On Monday the expected bounce left the index poised for further advances. The closing candlestick was bullish for Tuesday.

The Lower Bollinger Band is falling further below the 50 day. The Upper Bollinger Band is starting to turn back up.

The 50, 100 and 200 day moving averages are still climbing. There are still 6 up signals and two down signal caused when the Lower Bollinger Band movied above the 100 day moving average back on July 27 and on Aug 31 above the 50 day. The SPX chart is still more bullish than bearish.

Stock Market Outlook review of Mon Sep 14 2020

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising but still signaling oversold.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Sep 4. On Monday the down signal was weaker.

• 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 unchanged following Monday’s advance.

• 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 oversold.

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 also 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

3500 is resistance

3450 is resistance

3400 is resistance

3375 is resistance

3300 is support

3275 is support

3200 is support

3150 is support

3050 is support

3000 is support

2975 is light support

2950 is light support

2900 is light support

 Stock Market Outlook for Tomorrow – Tue Sep 15 2020 

Monday’s rally was good to see and was strong but it could also end up being a relief rally so caution is still advised. Tuesday should see the indexes open higher and try to push higher. It should be a choppy day however and dips could be deeper than expected. We may see some negative moments during the day. The close however still looks to be higher.

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