Tuesday was stronger than I expected with the SPX closing up half a percent to end the day at 4246. Intraday though the SPX reached 4255, just 2 points shy of the all-time high of 4257. On Wednesday we will see some sideways trading but a new high is likely. Let’s review the closing technical readings from Tuesday Jun 22 to see what they can tell us to expect for Wednesday.
Stock Market Outlook Chart Comments At The Close on Tue Jun 22 2021
Tuesday saw the S&P end the day above the 21 day moving average and just below the Upper Bollinger Band. If it moves higher on Wednesday it will pressure the Upper Bollinger Band to move higher as well. That is bullish.
The closing candlestick on Tuesday is bullish for Wednesday.
The Bollinger Bands Squeeze is still underway without any clear signal which way stocks will move out of the squeeze. However the 21 day moving average jumped higher on Tuesday which is bullish.
The 50, 100 and 200 day moving averages are climbing. These are bullish signals.
Aside from the Bollinger Bands Squeeze and its unknown outcome presently, the rest of the signals are all bullish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal Thursday June 17 2021. The down signal on Tuesday was cut almost in half from Monday. This is bullish.
- 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 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 has an up signal in place.
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 further..
- 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:
4250 is resistance
4225 is resistance
4200 is light support
4175 is light support and just below the 50 day moving average
4150 is light support
4100 is light support
4070 is very light support
4050 is light support and is where the 100 day moving average rests
4000 is good support
3900 is support
3850 is support
3800 is support and just below the 200 day moving average
3750 is good support
3700 is light support
3680 is light support
3600 is strong support
Stock Market Outlook for Tomorrow – Wed Jun 23 2021
For Wednesday the technical signals are almost all bullish and that usually means we should watch for potential dips.
Aside from that “contrarian” view, the technical indicators are pointing to the rally as still having more upside. A new high in the SPX intraday seems likely on Wednesday and a higher close as well.