Tuesday saw a strong rally on average volume which sent the SPX up 45 points to wipe out almost all of Monday’s drop. The index closed up 45 points to 4345.
The NASDAQ rose 178 points recovering 57% of Monday’s drop. The index closed at 14433.
Technically the NASDAQ bounce looked like a typical oversold bounce while the S&P bounce looked like a bounce that could last more than a single day.
Let’s review the closing technical indicators from the SPX on Tuesday to see what is predicted for Wednesday’s markets.
Stock Market Outlook Chart Comments At The Close on Tue Oct 5 2021
The most significant indicator on Tuesday was the 21 day continuing to fall lower below the 50 day. This is bearish.
The closing candlestick is also bearish as it points to Tuesday’s rally as being a one day only bounce.
The index closed above the 100 day moving average which is bullish.
The Upper Bollinger Band is falling further along with the Lower Bollinger Band. Both are bearish signals.
The 100 and 200 day moving averages are continuing to turn lower. This is bearish.
For Wednesday there is only one bullish signal.
Stock Market Outlook review of Tue Oct 5 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thu Sep 9. On Tuesday the down signal was still strong and oversold.
- 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 rising from oversold.
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 away from being oversold.
- 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:
4550 is resistance
4525 is resistance
4500 is resistance
4490 is resistance
4475 is resistance
4450 is resistance
4400 is resistance
4370 is light support
4350 is light support
4300 is light support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
4175 is light support
4150 is light support
4100 is good support
Stock Market Outlook for Tomorrow – Wed Oct 6 2021
Tuesday’s rally looks more like a one day bounce at present. Technical indicators are still advising caution as there are many signals pointing lower for stocks.
The chance of the index dipping lower near the open is high but the technical indicators point to any large dip on Wednesday as being an opportunity for a trade as the index should move higher as the day progresses.
If the index does move higher as expected, this will not be a signal of an end to the sell-off, but a breather instead.
Stock Market Outlook Archives
Stock Market Outlook For Wed May 6 2026 – Choppy But Higher Still
Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
