The biggest event for Thursday wasn’t the positive close. It was the index tumbling once again back to the 2800 level mid-morning. However this time the index held and sellers stopped refusing to dump shares and push the index lower. This signal advises that Friday will be higher.
Stock Market Outlook Chart Comments At The Close on Thu Mar 28 2019
All major moving averages are back where they belong and the 50 day and 100 day are both moving away from the 200 day. The 50 day moved above the Lower Bollinger Band today another indication that the market intends to move higher.
The closing candlestick was bullish for Friday and once again the SPX dipped to the 2800 level which is the 21 day moving average at present and then moved back up. The market looks ready to move higher. We should see the Bollinger Bands Squeeze end next week with the index moving higher.
Stock Market Outlook review of Thu Mar 28 2019
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and 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 Friday March 22 2019. The down signal was unchanged today.
- 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 an up signal in place and is ready to move higher.
- 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 unchanged which is usually a signal that stock prices are not expected to climb or fall much on Friday.
- 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 Resistance Levels To Be Aware Of:
2900 is strong resistance
2860 is resistance
2830 is light 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.
There was good support at the 2550 level which is back to being support.
The 2500 level is support.
The S&P has light support at 2480 and better support at 2450.
There is 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 of 641 points as a drop to this level would be 21% and just 5% away from a full bear market signal ending the bull market from 2009.
Stock Market Outlook for Tomorrow – Fri Mar 29 2019
Friday could see some weakness in the morning and even a move down to 2810 or 2805 wouldn’t be concerning. However the indicators are pointing to what could be the start of a move to retake the 2850 level next week.
Friday looks set to try to recover back to the 2825 or even 2835 valuations. There may not be a big move higher on Friday, but even a small move higher such as we saw today will setup the index for a push higher next week.
All week the index failed to breakdown and with billions of shares traded daily, many stocks have changed hands. Many concerned investors have sold out and that could set the stage for the next move up for the index as next week we start into April.
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