Stock Market Outlook for Wed Sep 15 2021 – Bounce Likely Off 50 Day – But Still Lower

Stock Market Outlook - Bounce Likely But Lower

On Tuesday the index jumped at the open making it to 4485 but then buyers disappeared and the rest of the day the index drifted lower. Two smaller rally attempted failed and the S&P ended the day down 25 points to close at 4443.

The index also reached the 50 day moving average in the late afternoon. Often this year we have seen the market rebound from dips to the 50 day.

Let’s review the closing technical signals to see what they advise investors should expected for Wed Sep 15 2021.


Stock Market Outlook Chart Comments At The Close on Tue Sep 14 2021 

The Lower Bollinger Band is still sideways at the 4400 level which is neutral. The Upper Bollinger Band is falling which is bearish.

The 21 and 50 day moving averages are also dipping lower which is bearish.

The closing candlestick on Tuesday is bearish for Wednesday. It also often signals a bounce as it reached the 50 day moving average (see black arrow in chart) and left the technical indicators oversold.

Only the 100 and 200 day moving averages are climbing. For Wednesday the SPX chart is more bearish than bullish.

Stock Market Outlook review of Tue Sep 14 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling 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 Tue Sep 14 the down signal strengthened. It is now the strongest down signal since May 19.

  • 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 into oversold readings.

  • 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 signaling 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 falling and singling 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 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:

4550 is resistance

4525 is resistance

4500 is resistance

4490 is resistance

4475 is light support

4450 is light support

4400 is good support

4370 is good 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

4070 is light support

4050 is light support

4000 is good support

3900 is support

3850 is support

3800 is support

3750 is good support

3700 is light support

3680 is light support

3600 is strong support


 Stock Market Outlook for Tomorrow – Wed Sep 15 2021 

The inflation report was not nearly as bad as analysts believed but buyers still held back and that resulted in the index slipping further on Tuesday.

With all the indicators negative and 3 showing oversold signals, plus the 50 day moving average being reached, investors should expect a bounce of some kind on Wednesday.

However even with a bounce the chance that this selling is over is small at present. That means any bounce is suspect on Wednesday and a lower close should be expected.

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