Stocks are among the riskiest of assets. They can make an investor wealthy but they can also surprise to the downside. This is primarily because investing in stocks is emotional for the majority of investors, especially over short periods of time. Today was an excellent example as everything from poor consumer confidence numbers to President Trump’s speech that was critical of China and Iran (among others) at the UN to the Democrats announcing an Impeachment Investigation, hit the market in a triple whammy. Considering all the bad news, the S&P actually held up well. It was the worst single day for the S&P and NASDAQ indexes for September, but it could have been worse. The S&P held the 2960 level while the NASDAQ closed down just below 8000.
Stock Market Outlook Chart Comments At The Close on Tue Sep 24 2019
The 21 day moving average continued to climb above the 50 day on Tuesday confirming the uptrend.
The closing candlestick was bearish for Wednesday. The candlestick reached 2960 and closed above it. A break below it looks likely.
The 100 and 200 day moving averages are still climbing, as they continue to signal higher prices are ahead for stocks.
The S&P chart is somewhat bullish heading into Wednesday but at present you can see the sideways pattern has broken to the downside. The S&P reached the 21 day moving average today and closed above it. The Lower Bollinger Band moved higher today and is above the 200 day. This could be the start of a Bollinger Bands Squeeze, but we will need a few more days to know for certain.
Stock Market Outlook review of Tue Sep 24 2019
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and falling.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thurs Aug 29. The up signal turned to a very weak down signal on Tuesday. We will need two more signals lower to confirm as today’s signal is too weak.
- 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 signal is negative and falling.
- 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 sell signal in place and is not 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 falling and starting to signal 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 which could mean we will see prices stabilize over the next couple of days. The drop today in stock prices may not last long.
- 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:
3000 is resistance
2960 is good support
2950 is light support
2900 is light support
2860 is light support
2840 is support
2800 is strong support
2795 is light support
2745 to 2750 is light support
2725 is light support
2700 is light support
2675 is light support
2650 is support
2625 is light support
2600 is support.
Stock Market Outlook for Tomorrow – Wed Sep 25 2019
There was just too much “bad news” for the markets to handle today. The fall lower, broke the sideway pattern for now. It also changed the technical indicators. All but one, are pointing to lower prices ahead. MACD even had a weak sell signal appear at the close. This is not confirmed however and the signal is more neutral than down as it is just -.08 which is a very weak sell signal.
For Wednesday stocks should bounce from being oversold on Tuesday but a dip below 2960 is likely and a lower close probable.
The rally is not over but it will stall here for the next day and might try a better bounce on Thursday.
Stock Market Outlook Archives
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Morning Investing Strategy Notes for Thu Apr 25 2024
Stock Market Outlook for Thu Apr 25 2024 – Weakness and Lower
Morning Investing Strategy Notes for Wed Apr 24 2024
Stock Market Outlook for Wed Apr 24 2024 – Some Weakness But Higher Close
Morning Investing Strategy Notes for Tue Apr 23 2024
Stock Market Outlook for Tue Apr 23 2024 – Bounce But Lower
Morning Investing Strategy Notes for Mon Apr 22 2024
Stock Market Outlook for Mon Apr 22 2024 – No Change – Deeply Oversold Bounce Possible
Morning Investing Strategy Notes for Fri Apr 19 2024
Stock Market Outlook for Fri Apr 19 2024 – Deeply Oversold – Bounce Likely – Higher Close
Morning Investing Strategy Notes for Thu Apr 18 2024
Stock Market Outlook for Thu Apr 18 2024 – Deeply Oversold – Bounce Attempt Expected
Morning Investing Strategy Notes for Wed Apr 17 2024
Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt
