On Tue Mar 16 2021 the S&P had a rather choppy session which ended the day lower by just 6 points.
The NASDAQ rose just 11 points and the Dow fell 127. The markets are waiting for the Fed Chair’s comments on Wednesday.
Stock Market Outlook Chart Comments At The Close on Tue Mar 16 2021
The Bollinger Bands Squeeze widened further again on Tuesday. This remains bullish for the index. The closing candlestick on Tuesday was bearish to neutral for Wednesday.
The index is nearing the Upper Bollinger Band and the 21 day moving average is rising again.
The 50, 100 and 200 day moving averages are climbing higher.
The chart is still more bullish for Wednesday but with the Fed meeting coming up we could see some dips and volatility despite the chart remaining bullish.
Stock Market Outlook review of Tue Mar 16 2021
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 an up signal on Thursday March 11 2021. On Tuesday the up signal remains strong.
- 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 as it trends sideways.
- 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 for a seventh straight day, but is extremely overbought and could easily issue a down signal during on 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 falling slightly and is overbought.
- 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:
4000 is resistance
3900 is resistance
3850 is support
3800 is support
3750 is good support and has assisted in keeping the selling in check
3700 is light support
3680 is light support – The 100 day moving average is at this valuation.
3600 is strong support
3550 is support
3500 is strong support
3450 is support. The 200 day moving average is just above this valuation. A drop this low would represent an 11% correction.
Stock Market Outlook for Tomorrow – Wed Mar 17 2021
For Wednesday investors should expect some weakness in the morning but then a potential rally ahead of the Fed’s news conference.
The technical indicators are weaker as of Tuesday’s close which means dips should be expected. For now, dips remain opportunities as the bias is still bullish.
The close on Wednesday could turn either way depending on what the Fed Chair Powell says but in general another down day looks more likely.
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