Friday’s market action was stronger than expected. On the S&P 51 points were added, almost matching Thursday’s 54 points gain. On the NASDAQ though 279 points were added beating Thursday’s 178 point gain. Friday’s strong showing left the S&P with a 2% gain for the month of March and down just 6% for the year. The NASDAQ ended Friday with a 1% gain for March and down 11% for the year.
Friday’s strong showing pushed the S&P back above the 200 and 50 day moving averages. It closed at the 100 day. The NASDAQ closed above the 50 and 21 day moving averages and within 386 points of the 200 day moving average which it fell below on Jan 18.
Let’s review Friday’s closing numbers to see what to expect for Mon Mar 21 2022.
Stock Market Outlook Chart Comments At The Close on Fri Mar 18 2022
The S&P chart shows further improvements following Friday’s close. The closing candlestick points to an overbought market that will see some profit-taking on Monday. The candlestick also points to a higher close for Monday. The bullish candlestick advises that investors who missed the rally last week will use any dips, particularly deep ones, to jump into stocks.
The closing candlestick on Friday pushed above the 200 day moving average to close at the Upper Bollinger Band. It is not above all the major moving averages except the 100 day.
More important is for the first time the 21 day moving average is no longer falling but trending sideways and starting to turn back up. Equally important, the Lower Bollinger Band is turning up as well. Both of these are bullish events.
The SPX still has 4 down signals in place. The 200, 50 and 100 day moving averages are still falling lower.
The chart is more bullish than it has been in days and at the highest valuation since Feb 11. The chart indicates the market is overbought but there is still room to the upside.
Stock Market Outlook review of Fri Mar 18 2022
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 an up signal Wed Mar 16 2022. On Friday the MACD signal was very strong with a reading of 23.41. The MACD histogram also has a very strong reading which is quite noticeable in the chart.
- 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 for a fourth day and on the verge of overbought signals.
- 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 still has a strong up signal in place and signaling 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 rising for a fourth day and signaling overbought.
- 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 and indicates prices will rise again on Monday.
- 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:
4500 is resistance
4490 is light resistance
4475 is light resistance
4450 is light resistance
4400 is resistance
4370 is light resistance
4350 is light support.
4300 is good support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
4150 is good support
4000 is good support
Stock Market Outlook for Tomorrow – Mon Mar 21 2022
For Monday the signals are overwhelmingly positive for the market. There will be some profit-taking as the index is overbought but it will not hold back the rally higher.
By the close of trading on Monday the index will be higher although a day as big as we saw on Friday is unlikely to start the week off.
Stock Market Outlook Archives
Stock Market Outlook for Tue Nov 19 2024 – Unconfirmed MACD Down Signal
Morning Investing Strategy Notes for Mon Nov 18 2024
Stock Market Outlook for Mon Nov 18 2024 – Choppy – Possible Bounce Attempt
Morning Investing Strategy Notes for Fri Nov 15 2024
Stock Market Outlook for Fri Nov 15 2024 – Choppy With Bias Lower
Stock Market Outlook for Thu Nov 14 2024 – Choppy – Dips Possible But Higher Close
Morning Investing Strategy Notes for Thu Nov 14 2024
Morning Investing Strategy Notes for Wed Nov 13 2024
Stock Market Outlook for Wed Nov 13 2024 – Choppy Trading Bias Lower
Morning Investing Strategy Notes for Tue Nov 12 2024
Stock Market Outlook for Tue Nov 12 2024 – Overbought – Dips Likely But Bullish
Morning Investing Strategy Notes for Mon Nov 11 2024
Stock Market Outlook for Mon Nov 11 2024 – Overbought – Higher Still
Morning Investing Strategy Notes for Fri Nov 8 2024
Stock Market Outlook for Fri Nov 8 2024 – Overbought – Dips Likely But Higher Close