On Thursday the indexes closed higher as expected, thanks to NVIDIA Stock (NVDA) rallying by over $74.00 for a 24% one day gain.
This was enough to move part of the market higher despite the majority of the stocks on both the NASDAQ and SPX, falling.
The S&P gained 36 points and ended the day at 4151.
The NASDAQ gain 214 points to end the day at 12,698.
Let’s review the SPX closing technical indicators on Thu May 25 to see what to expect for Fri May 26 2023.
Stock Market Outlook Chart Comments At The Close on Thu May 25 2023
The index closed with a bearish candlestick for Friday, indicating the bounce from Thursday may last partway into Friday.
The SPX closed above the 21 day moving average.
The 100 day moving average is still moving above the Lower Bollinger Band. This is bullish.
All major moving averages are climbing which is bullish.
The S&P chart is more bullish than bearish for Thursday.
There are 7 up signal since January and no down signal in the chart.
Stock Market Outlook review of Thu May 25 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and popsitive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an unconfirmed down signal on Wednesday. That unconfirmed signal continued on Thursday.
- 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 falling and negative.
- 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 rising 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.
- 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 26 2023
For Friday the technical outlook is more mixed than it was at any time this week. The candlestick is often see before a down day.
On Thursday the market over higher but most stocks actually fell lower. A handful of stocks such as NVIDIA Stock (NVDA) are in uptrends and many investors are trading into the momentum plays. That has indexes rising as more capital is being spent on the higher volatile stocks.
On Friday we should expect some weakness but the close should be flat to slightly bearish.
Potential Economic and Political Market Moving Events
On Friday there are a large number of reports that will impact the indexes.
Friday:
8:30 Durable goods including durable goods minus transportation
8:30 Personal income and spending
8:30 PCE Index
8:30 Core PCE Index
8:30 PCE year-over-year
8:30 Core PCE index year-over-year
8:30 Advanced trade balance in goods
8:30 Advanced retail inventories
8:30 Advanced wholesale inventories
10:00 Consumer Sentiment