On Thursday stocks soared higher mid-afternoon on hope for a debt ceiling resolution by next week. As well, stronger than expected revenue and earnings from Walmart (WMT) surprised analysts and showed the consumer is continuing to spend.
By the end of the day the S&P was up 39 points to 4198 after briefly touching 4200. The NASDAQ rose 188 points to close at 12,688.
For the week, the S&P has added 74 points while the NASDAQ has increased 404 points albeit on some of the lowest volumes of the year. Even today New York struggled to reach 4 billion shares traded.
Let’s review the SPX closing technical indicators on Thursday to see what to expect for Fri May 19 2023.
Stock Market Outlook Chart Comments At The Close on Thu May 18 2023
The index closed with a bullish candlestick for Friday. This is the second straight bullish candlestick.
The SPX closed above the 21 day moving average and at the Upper Bollinger Band which is bullish.
The Bollinger Bands Squeeze is ending with stocks moving higher.
The 50 day continued moving above the Lower Bollinger Band which is bullish.
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 rising.
The S&P chart is more bullish than bearish for Friday.
There are 7 up signal since January and no down signal in the chart.
Stock Market Outlook review of Thu May 18 2023
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 signal on Tue Apr 25 2023. On Thu May 18 a new unconfirmed up signal was generated.
- 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 nearing overbought.
- 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 sharply and 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 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 19 2023
For Friday the technical indicators are gaining strength to the upside. The MACD indicator issued a new up signal at the close on Thursday. We should see that up signal confirmed on Friday.
There could be a bit of weakness in the morning on Friday but it shouldn’t last long as the index will close at 4200 on Friday.
Potential Economic and Political Market Moving Events
There are no events of significance on Friday to change the market direction from up.