On Friday the March unemployment report showed surprising strength within the jobs market as 236,000 jobs were created and the unemployment rate dipped back to 3.5%. This was down from the prior month but slightly ahead of estimates. It should be enough to see stocks not sell-off to start the week.
This is an important week for stocks as investors get the latest CPI numbers, minutes of the FOMC meeting, PPI and the start of the next quarter earnings. Banks begin reporting this week which could see stocks move lower or higher.
Volumes were low on Thursday ahead of the Easter long weekend but indexes did close higher. The SPX was up 14 points to close at 4105 and the NASDAQ was up 91 points to close at 12087.
One other event on Thursday should be felt early this week as a new up signal was generated on Thursday when the 21 day moving average closed above the 200 day.
Let’s review the closing technical indicators from Thu Apr 6 2023 to see what we should expect for Mon Apr 10 2023.
Stock Market Outlook Chart Comments At The Close on Thu Apr 6 2023
The index closed with a bullish candlestick for Monday but also more signals advising the index is still overbought.
The Upper Bollinger Band is turning up and the Lower Bollinger Band is turning down. Both are bullish signals.
The 200 day moving average is at 4000 and climbing which is bullish. The 21 day is above the 100 day for a new up signal. This wipes out the March 17 down signal.
The 50 day continues above the 200 day which is bullish. The 100 day is moving sideways just below the 21 day which is the only bearish signal from the moving averages.
If you look at the list of down and up signals, there are now just 2 down signals in play with the most important being the April 24 down signal. That signal is now almost a year old and is a prime reason many analysts still believe this is a bear market. There are 4 up signal since January. The morning could see weakness but the end of the day is expected to be higher based on the closing candlestick from Thursdsay.
Stock Market Outlook review of Thu Apr 6 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) up signal from Mar 21 gained strength. The histogram is also higher.
- 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. It is signaling 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 a down signal in place. It is also 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 and positive. It is also 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. It is signaling a move higher for the start of the week.
- 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:
4150 is resstance
4135 is resistance
4125 is resistance
4100 is resistance
4090 is resistance
4075 is resistance
4050 is resistance
4030 is light support
4025 is light support
4000 is support
3975 is light support
3965 is light support
3950 is good support
3930 is light support
3900 is good support
Stock Market Outlook for Mon Apr 10 2023
Monday will see some dips, but with only the Wholesale Inventories report due out today, there is a strong likelihood of the index rallying.
The March non-farm payroll numbers were better than expected but were still lower the the prior month which is what investors know the Fed wants to see. This should embolden many investors that the Fed will be pausing further rate hikes until more data is known.
On Monday expect dips and weakness at various times throughout the day but a higher close is likely.
Potential Economic and Political Market Moving Events
Monday:
10:00 Wholesale Inventories