Tuesday opened with a bounce in the S&P to 3870 but that ended up being the high of the day.
For the day though the most important aspect of the chart pattern was the inability of the index to break below 1850. There were a number of attempts including right at the close but sellers dried up and buyers held on allowing the index to close at 3489 for a loss of just 5 points.
Stock Market Outlook Chart Comments At The Close on Tue Jan 26 2021
Tuesday marked the third day of a bearish closing candlestick. It’s a concern after three days but the only other bearish signal might be the Lower Bollinger Band continuing to turn up and is once again nearing the 50 day moving average.
Aside from those two signals, the rest of the chart is still bullish with all the major moving averages still climbing higher. The 100 day is nearing the 3600 valuation which is also bullish.
The Upper Bollinger Band is still climbing despite the index moving more sideways than higher. Overall the chart is more bullish than bearish but there is weakness which we will see again on Wednesday.
Stock Market Outlook review of Tue Jan 26 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising slightly 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 Jan 20. The up signal was still active on Tuesday but greatly weakened by 3 days of the index not “going anywhere”.
- 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 and not signaling overbought.
- 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 falling.
- 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 falling.
- 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:
3850 is resistance
3800 is support
3750 is support
3700 is light support
3600 is strong support
3550 is support
3500 is strong support
3450 is support
3400 is support
3375 is support
3300 is strong support
3275 is support
3200 is support
3150 is support
3050 is support
3000 is strong support
Stock Market Outlook for Tomorrow – Wed Jan 27 2021
For Wednesday the technical indicators are slipping with only momentum having turned higher. The other indicators have all lost strength after Tuesday’s close. MACD is clinging to an up signal which could turn to a down signal easily if we have another down day on Wednesday.
Overall the outlook is back to weakness and another potentially lower close on Wednesday.
Stock Market Outlook Archives
Morning Investing Strategy Notes for Tue Jun 10 2025
Stock Market Outlook For Tue Jun 10 2025 – Choppy – Dips Likely But Higher
Morning Investing Strategy Notes for Mon Jun 9 2025
Stock Market Outlook For Mon Jun 9 2025 – Choppy With Bias Higher
Morning Investing Strategy Notes for Fri Jun 6 2025
Stock Market Outlook For Fri Jun 6 2025 – All About May Jobs Numbers
Morning Investing Strategy Notes for Thu Jun 5 2025
Stock Market Outlook For Thu Jun 5 2025 – Weakness – Dips Likely – Still Bullish
Morning Investing Strategy Notes for Wed Jun 4 2025
Stock Market Outlook For Wed Jun 4 2025 – Mixed Outlook But Still Bullish
Morning Investing Strategy Notes for Tue Jun 3 2025
Stock Market Outlook For Tue Jun 3 2025 – Weakness Continuing
