On Thursday, volumes dip for the last trading day before the Christmas holiday period. The lower volume assisted the bulls as all three indexes pushed higher and closed higher.
The S&P came within a handful of points of the old 52 week high. It closed at 4726 for a gain of 0.62 percent on the day.
This helped setup the index to prepare the final week, for the Santa Claus Rally in stocks.
Let’s review Thursday’s (Dec 23) close to see what to expect on Monday (Dec 27) after the long Christmas holiday weekend.
Stock Market Outlook Chart Comments At The Close on Thu Dec 23 2021
The closing candlestick on Thursday is bullish for Monday but also is signaling for investor to prepare for a weak start to the day on Monday.
The 21 day moving average is still falling which is bearish and it is nearing the 50 day moving average.
The Lower Bollinger Band fell below the 100 day moving average on Wednesday last week, which is bullish.
Meanwhile the 50, 100 and 200 day moving averages are still climbing which is also bullish.
For Monday Dec 27 2021, the chart is almost completely bullish.
Stock Market Outlook review of Thu Dec 23 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down up signal on Fri Dec 17 2021 . On Friday the down signal was gone. MACD issued an unconfirmed up signal.
- 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 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.
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:
4725 is resistance
4700 is resistance
4670 is support
4655 is light support.
4600 is good support
4550 is light support
4525 is light support
4500 is support
Stock Market Outlook for Tomorrow – Mon Dec 27 2021
For Monday the technical indicators are pointing to a weak start and probably a dip in the morning before recovering and moving higher.
Monday Dec 27 is the unofficial start to the so-called Santa Claus Rally period. Historically this period covers the final 5 trading days of the year and the first two trading days of the new year.
The technical indicators are pointing to an up day by the close on Monday.
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