Stock Market Outlook for Mon Sep 25 2023 – Second Bounce Attempt But Still Bearish

Sep 25, 2023 | Stock Market Outlook

Stock Market Outlook Another bounce attempt probable

Prior Trading Day Summary

On Friday investors attempted a bounce which lasted until the afternoon when sellers returned and pushed back at buyers. Another attempt late afternoon also found ready sellers who sent the index still lower into the close.

The SPX fell 9 points ending the day at 4320.

The NASDAQ lost 12 points to close at 13,211.

By the close on Friday stocks were very oversold and below all major moving averages except the 200 period. They were below the August lows.

Let’s review the closing technical indicators from Fri Sep 22 2023 to see what to expect for the start of the final week of September.

Stock Market Outlook: SPX Closing Chart For Fri Sep 22 2023

The index closed below the 50, 21 and 100 period moving averages for a second day which is bearish. The closing candlestick is bearish but also signals very oversold with another chance for a bounce.

The 50 period and 21 period moving averages are falling which is bearish. The 100 and 200 period moving averages are continuing to climb which is bullish.

The Lower Bollinger Band is falling which is bullish. The Upper Bollinger Band is rising which is also bullish and signals the latest Bollinger Bands Squeeze is over.

Stock Market Outlook review of Fri Sep 22 2023

Stock Market Outlook: Technical Indicators Review

Momentum: Momentum is falling sharply and negative. It is signaling oversold.

  • Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Mon Sep 18. On Friday the down signal was much stronger.

  • 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 unchanged and negative. It is oversold.

  • 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 and is extremely oversold.

  • 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 falling and negative. It is oversold.

  • 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 and negative. It is at levels where a bounce should be expected.

  • 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.

Stock Market Outlook: Support and Resistance Levels

4600 is resistance
4575 is resistance
4550 is resistance
4525 is resistance
4500 is resistance
4485 is resistance
4470 is resistance
4450 is support
4435 is support
4420 is support
4400 is support
4390 is support
4370 is support
4350 is support
4330 is support
4325 is support
4300 is good support

Stock Market Outlook for Mon Sep 25 2023 

For Monday stocks are sitting extremely oversold and set to attempt another bounce. There are however many headwinds for stocks. If Treasury yields were to dip on Monday and oil pullback a couple dollars, the market would have a good chance for a strong rally. Instead without those catalysts, any bounce will probably continue to find ready sellers.

Monday has a good chance for a second bounce attempt but the late afternoon could, once again, find sellers. If there is no bounce on Monday the support / resistance levels will start to see changes in the table above.

Potential Economic and Political Market Moving Events

This week the reports are lighter which could assist the bulls. The most telling report is the PCE Index on Friday.


No significant reports


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