On Wednesday stocks continued their advance. The S&P rose to meet the 52 week high and closed just below it at 3334.69. The NASDAQ moved still higher with an intraday high of 9574 and a new all-time closing high of 9508. The Dow Jones closed at 29,290.85 a gain of 483 points and just 83 points from the all-time high.
Stock Market Outlook Chart Comments At The Close on Wed Feb 5 2020
The SPX chart is no longer bearish as the index is pushing the Upper Bollinger Band. If it rises further it will eliminate the chance of a Bollinger Bands Squeeze forming.
The closing candlestick on Wednesday is bullish for Thursday although it is also signaling an overbought market now exists.
All the major moving averages are back climbing higher.
There are four support levels in place. These are light support at 3200, 3100 which is a full 100 points lower, 3075 which is light support and 3000 which is major support.
Stock Market Outlook review of Wed Feb 5 2020
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 Jan 24. At the close on Wednesday the sell signal was considerably 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 signal is rising.
- 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 for Thursday.
- 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 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:
3325 is resistance
3200 is light support
3100 is light support
3075 is light support
3030 is very light support
3000 is good support and if the S&P fell this low it would mark a normal correction in a bull market
2960 is light support
2900 is light support
2860 is light support
2840 is good support
2800 is strong support
Stock Market Outlook for Tomorrow – Thu Feb 6 2020
After another day of rallying the index is now up to the Upper Bollinger Band. We should see weakness in the morning although the futures are showing the index as opening higher again on Thursday.
The outlook is higher for the index but many stocks are overbought and dips should be expected. Nonetheless, the outlook is still up for stocks.
Stock Market Outlook Archives
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Morning Investing Strategy Notes for Fri Jan 3 2025
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Morning Investing Strategy Notes for Thu Jan 2 2025
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Morning Investing Strategy Notes for Tue Dec 31 2024
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Stock Market Outlook for Tue Dec 31 2024 – Possible Bounce But Santa May Be Gone
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Morning Investing Strategy Notes for Mon Dec 30 2024
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Stock Market Outlook for Mon Dec 30 2024 – Looking For Santa Claus Rally
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Morning Investing Strategy Notes for Fri Dec 27 2024
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Morning Investing Strategy Notes for Thu Dec 26 2024
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Stock Market Outlook for Thu Dec 26 2024 – Continuing To Run Higher
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Morning Investing Strategy Notes for Tue Dec 24 2024
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Stock Market Outlook for Tue Dec 24 2024 – Weakness With Possible Dip But Still Bias Up
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Morning Investing Strategy Notes for Mon Dec 23 2024
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Stock Market Outlook for Mon Dec 23 2024 – Possible Dip But Still Bullish and Higher
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Morning Investing Strategy Notes for Fri Dec 20 2024
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Stock Market Outlook for Fri Dec 20 2024 – Potential Second Bounce But Lower
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