On Thursdayy the PPI reports matched yesterday’s CPI reports by showing inflation is slowing. The PPI came in at 0.2% for April versus 0.3% expected.
PPI year-over-year came in at 2.3%, down from 2.7% for the prior month and core PPI was 3.4% down from 3.7% for April.
The S&P closed lower on the day by 7 points to 4130. The NASDAQ closed up 22 points to 12328.
Let’s review the SPX closing technical indicators on Thursday to see what to expect for Fri May 12 2023.
Stock Market Outlook Chart Comments At The Close on Thu May 11 2023
The index closed with a bullish candlestick for Friday. At the same time the closing candlestick also points to a lower morning before stocks rally higher.
The SPX closed just above the 21 day moving average which is bullish.
The Bollinger Bands Squeeze is continuing and looks steady to see stocks move higher.
All major moving averages are climbing which is bullish and the 100 day continued to move higher above the 200 day.
The 21 day moving average is also turning back up.
The S&P chart is bullish for Friday.
There are 7 up signal since January and no down signal left in the chart.
Stock Market Outlook review of Thu May 11 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and neutral.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tue Apr 25 2023. That down signal was almost gone on Thursday by the close.
- 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 and positive.
- 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 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 falling and positive.
- 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 positive.
- 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:
4250 is resistance
4240 is resistance
4225 is resistance
4210 is resistance
4200 is resistance
4190 is resistance
4180 is resistance
4175 is resistance
4150 is resistance
4135 is resistance
4125 is support
4100 is support
4090 is support
4075 is support
4050 is support
4030 is light support
4025 is light support
4000 is support
Stock Market Outlook for Fri May 12 2023
For Friday the technical signals are more mixed than they were for the start on Thursday. For Friday there are a number of indicators advising the day will end lower while others continue to predict the day will close positive.
With both the CPI and PPI reports out-of-the-way and both supporting the belief inflation is slowing, the majority of the indicators remain positive and are pointing to the index as ending higher on Friday. Theare are chances of dips on Friday but the close should still be higher.
Potential Economic and Political Market Moving Events
Friday:
8:30 Import Price Index
10:00 Consumer Sentiment for May is expected to come in at 63.