On Wed Sep 26 2018 the stock market outlook will depend on the Fed’s decision on interest rates. Survey show 100% of investors and analysts surveyed believe the Fed will increase rates by yet another quarter of a point.
Here is the technical outlook for Wednesday but it will probably be impacted more by the Fed’s rate decision than on pure technical readings.
Stock Market Outlook Chart Comments At The Close on Tue Sep 25 2018
The S&P cdid not dip as deep as it did on Monday. Instead the movement was more sideways than down. It closed below the Upper Bollinger Band but above the 21 day moving average. This left behind a bearish candlestick for Wednesday.
The 21 day moving average is continuing to climb.
The Lower Bollinger Band continued above the 50 day moving average and is now into a Bollinger Bands Squeeze.
All the major moving averages are continuing to climb. Overall the S&P chart still has a bullish outlook but there are some signs there could be a deeper dip down to the 21 day moving average this week.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive but 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 Thursday Sep 20. That signal was much weaker today. One more down day and it will turn negative.
- 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 positive 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 down signal for Wednesday 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 moving lower.
- 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 moving lower.
- 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 Levels To Be Aware Of:
2860 is light support
2830 is light support
2795 is light support
2745 to 2750 is light support
2725 is light support.
2700 is support.
2675 is light support.
2650 is light support
2620 is light support
2600 is strong support.
There is good support at the 2550 level from where the market bounced back from the recent correction low on Feb 9.
The S&P has light support at 2480. It also has light support at 2450 and good support at 2425. Below that there is some support at 2400, 2380, 2350. 2300 has the most support at present but would represent a full correction as a drop to this level would be 20% and just 5% away from a potential bear market signal.
Stock Market Outlook for Tomorrow – Wed Sep 26 2018
A lot of the market movement into the close on Wednesday will depend on how investors react to the next rate increase by the Federal Reserve.
Analysts believe investors are prepared for the rate increase and won’t react.
If the technical indicators do play a part on Wednesday, then the S&P looks set to move lower. However Wednesday is all about the Fed so it’s anyone’s guess how investors will react.
Stock Market Outlook Archives