Stock Market Outlook for Wed Nov 25 2020 – Higher Open and Higher Close

Stock Market Outlook Higher Open Higher Close

Tuesday saw investors cheer the news of Janet Yellen being selected for Treasury Secretary.

 

All indexes climbed with the Dow Jones closing above 30,000, an incredible milestone. The S&P closed at a new high of 3635 and came close to the all-time intraday high of 3642 made on Nov 9. The NASDAQ closed back above 12,000.


Stock Market Outlook Chart Comments At The Close on Tue Nov 24 2020 

Tuesday saw the index close back above the 3600 level.  The closing candlestick is bullish for Wednesday.

The Upper Bollinger Band continues to climb above SPX 3600 closing around 3720 on Tuesday which is bullish.  The Lower Bollinger Band is at the 200 day.

The 21 day, 50 day, 100 day and 200 day moving averages are all rising, a bullish sign. The up signal from Oct 21 is still in play, and the chart remains bullish despite the selling last week.

Stock Market Outlook review of Tue Nov 24 2020

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 Nov 5. On Tuesday the up signal was stronger.

  • 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 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 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 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:

3600 is resistance

3550 is support

3500 is support

3450 is support

3400 is support

3375 is support

3300 is support

3275 is support

3200 is support

3150 is support

3050 is support

3000 is support


 Stock Market Outlook for Tomorrow – Wed Nov 25 2020 

The 3550 level is now light support following a close back above 3600 today.

All the technical indicators have gained strength and all are rising. Normally we should expect to see a bit of a pullback or dip on Wednesday when we see all the indicators in agreement. However Thursday is a holiday and Friday is a half day. Effectively then, Wednesday is the final day of note for this week and with many investors starting their holiday early on Wednesday, volumes are expected to be lower.

For Wednesday Nov 25 we should see the rally continue. The day should start higher, could take a dip but the close of trading will see the index higher as well.


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