Tuesday’s market started off strong with the S&P above 3400. By 1:30 the index was still holding above 4100 but was unable to make any further headway. Selling emerged until by 3:40 the S&P was at the low of the day down to 3390. The close saw a small rally in the last 20 minutes to push the S&P to just above 3400 for 17 points to close at 3401.
Stock Market Outlook Chart Comments At The Close on Tue Sep 15 2020
On Tuesday the rally from Monday continued. The index closed below the 21 day moving average but above the 50 day. The closing candlestick is neutral for Wednesday.
Both the Lower Bollinger Band and Upper Bollinger Band are turning sideways.
The 50, 100 and 200 day moving averages are still climbing. There are still 6 up signals and two down signal caused when the Lower Bollinger Band movied above the 100 day moving average back on July 27 and on Aug 31 above the 50 day. The SPX chart is still more bullish than bearish.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Sep 4. On Tuesday the down signal was weaker.
- 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 was rising on Tuesday.
- 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 strong up signal in place and is 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.
- 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 also 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
3500 is resistance
3450 is resistance
3400 is resistance
3375 is resistance
3300 is support
3275 is support
3200 is support
3150 is support
3050 is support
3000 is support
2975 is light support
2950 is light support
2900 is light support
Stock Market Outlook for Tomorrow – Wed Sep 16 2020
For Wednesday the technical indicators are pointing to the index as continuing to advance. The closing candlestick on Tuesday is indicative of potential dips today however in general the outlook is still for a higher close.
On Wednesday we get the latest Fed report which should show continued support for liquidity and zero interest rates. Basically, no changes are expected.