Stock Market Outlook for Wed Aug 14 2019 – Choppy But Higher

Stock Market Outlook - choppy bias higher

Tuesday saw markets rally hard following a decision to delay some tariffs from September implementation, to December. Investors saw this as a possible softening of trade negotiations and were hopeful there would be a trade deal of some kind, worked out. They bought stocks and sent all three indexes considerably higher.


Stock Market Outlook Chart Comments At The Close on Tue Aug 13 2019 

The SPX chart looks a lot better after Tuesday’s massive rally. This is the second large rally in 4 trading days. The closing candlestick on Tuesday is bullish for Wednesday. The Upper Bollinger Band is still continuing to fall however which is bearish.  The 21 day moving average is also continuing to fall and could cross below the 50 day shortly which will be a down signal if it happens. The three major indexes are all still climbing. The index closed back above 2900 on Tuesday which is bullish for the index.

Stock Market Outlook review of Tue Aug 13 2019


Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is negative 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 Thursday July 18. The down signal was not as strong on Tuesday.

  • 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 and still 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 signal has a down signal in place for Wednesday.

  • 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:

3000 is resistance

2960 is light resistance

2900 is light support

2860 is better support

2830 is light 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 – Wed Aug 14 2019 

The technical indicators are stronger today after the rally. The Slow Stochastic is the only indicator that has changed from up to a down signal. MACD is still negative but has lost a lot of its strength.

While the indicators are still a long way from being overly positive, there is enough strength in most of them for the index to push higher on Wednesday.

There will however be some dips and they could be deeper than expected, but by the close, the S&P will be higher.


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