On Friday stocks moved higher again, reaching 4322 before closing at 4298. For the day the index gained 5 points and for the week it gained 16 points. This was the fourth straight week of gains for the SPX.
The NASDAQ rose 20 points to end the day at 13259 and for the week it was up 18 points. This was the seventh straight week of gains for the NASDAQ, albeit a much smaller gain at just 18 points.
This upcoming week investors get the latest Fed interest rate decision. That could be the pivoting moment for when the index climbs higher should there be a pause in interest rates, or lower, should the Fed raise rates yet again.
Let’s review the SPX closing technical indicators from Fri Jun 9 2023 to see what to expect for Mon Jun 12 2023.
Stock Market Outlook Chart Comments At The Close on Fri Jun 9 2023
The index continued to struggle at the 4300 level on Friday and while it closed higher, it was still unable to move above 4300. The closing candlestick is bullish for Monday but also is often seen before a weak day or two for the markets. Considering the Wednesday we get the Fed’s latest interest rate decision, the type of closing candlestick is not unusual.
The SPX continues above the 21 day moving average and is just inside the Upper Bollinger Band. This is bullish.
The 100 day moving average continued higher on Friday moving further away from the Lower Bollinger Band. This is bullish
The Lower Bollinger Band is turning lower which is bullish.
The 21, 50, 100 and 200 day moving averages are rising which is bullish.
The S&P chart is more bullish than bearish but continues to warn that the market is overbought.
There are 7 up signal since January and no down signal in the chart.
Stock Market Outlook review of Fri Jun 9 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and positive. It is nearng overbought levels.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Friday May 26. The up signal was a bit weaker on Friday. The MACD histogram was also slightly weaker.
- 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 sharply, just barely positive as it is on the verge of turning 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 an up signal in place. It is 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 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 falling indicating some weakness should be expected to start 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:
4325 is resistance
4310 is resistance
4300 is resistance
4290 is resistance
4275 is resistance
4250 is resistance
4240 is resistance
4225 is resistance
4210 is resistance
4200 is resistance
4190 is resistance
4180 is support
4175 is support
4150 is support
4135 is support
4125 is support
4100 is support
Stock Market Outlook for Mon Jun 12 2023
The technical indicators are slightly bullish for Monday but they are also warning that some weakness should be expected to start off the week. The weakness though is not a change in signal. It is simply weakness ahead of the Fed’s latest interest rate decision due out on Wednesday afternoon.
The S&P moved above 4300 on Friday but could not hold. It closed at 4298 the highest level since August of 2022. The inability of the market to close above 4300, at this point, is not unusual. Stocks need more buyers and they may get that, if the Fed pauses interest rate hikes on Wednesday.
For Monday a choppy day with weakness should be expected. There is a possibility of a higher close but even if the index closed lower, this will not signal a change in trend, just weakness.
Potential Economic and Political Market Moving Events
This week the big event is on Wednesday afternoon when the Fed announces the decision on interest rates.
Monday:
2:00 Federal Budget is expected to come in at -$235.5 billion. A better number will assist stocks.