Prior Trading Day Summary
On Friday markets had another sell-off with the index moving below the 200 day moving average and touching the Lower Bollinger Band in wide selling. There were just 4 new highs on Friday but 401 new lows. The SPX lost 53 points to close at 4224. For the week the index was down 103 points. This was the worst week since the third week of September which saw a decline of 130 points.
The NASDAQ fell 202 points to end the day at 12,983. There were only 10 new highs but 544 new lows. For the week the NASDAQ lost 423 points. Again, this was the worst week since the third week of September which saw a loss of 496 points.
The drop on Friday ended a week that saw the SPX below the 200 day moving average and ready to bounce. The question is how high might a bounce be. The close saw a new unconfirmed down signal from the Moving Average Convergence / Divergence (MACD) technical indicator.
Let’s review the closing technical indicators from Fri Oct 20 2023 to see what to expect for Mon Oct 23 2023.
Stock Market Outlook: SPX Closing Chart For Thu Oct 19 2023
The index closed below all major moving averages which is bearish.
The closing candlestick is bearish for Monday but also it would be rare not see some kind of bounce with the index below the 200 day moving average.
The 21, 50 and 100 day moving averages are all falling. This is bearish. The 21 day moving average is nearing the 200 day.
The 200 day moving average is turning sideways which is bearish.
The Lower Bollinger Band is turning lower which is bearish and could signal more downside to come. The Upper Bollinger Band is also turning sideways and the Bollinger Bands Squeeze may end with the index falling lower.
The S&P chart is quite bearish as of Friday’s close. Sometimes this leads to a bounce, especially with the index brushing against the 200 day and closing at the lows for the day on Friday.
Stock Market Outlook review of Fri Oct 20 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and negative.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tue Oct 10. On Fri Oct 20 2023 an unconfirmed down signal was released. The histogram turned negative.
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Ultimate Oscillator: The Ultimate Oscillator is falling and negative.
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Slow Stochastic: The Slow Stochastic has a down signal in place and falling.
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Relative Strength Index: The RSI signal is falling and negative. It is entering oversold readings.
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Rate of Change: The rate of change signal is rising and negative. A bounce could occur anytime.
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Stock Market Outlook: Support and Resistance Levels |
| 4450 is resistance |
| 4435 is resistance |
| 4420 is resistance |
| 4400 is resistance |
| 4390 is resistance |
| 4370 is resistance |
| 4350 is resistance |
| 4325 is resistance |
| 4300 is support |
| 4275 is support |
| 4250 is good support |
| 4235 is support |
| 4225 is support |
| 4200 is good support |
| 4185 is support |
| 4175 is support |
| 4150 is good support |
Stock Market Outlook for Mon Oct 23 2023
The index is signaling oversold with many of the technical indicators. It is also below the 200 day after two days of selling, Thursday and Friday last week. It would be rare for the index to just keep on falling. A bounce back to at least the 200 day should be expected. This could happen as early as Monday. More downside though should be expected after any bounce.
Potential Economic and Political Market Moving Events
The most important reports this week are services PMI on Tuesday, durable goods orders on Thursday and PCE on Friday. Any of these could move markets.
Monday:
There are no economic reports