While the NASDAQ saw steeper losses than the other two major indexes due to the historic plunge of Netflix Stock (NFLX), the day was stronger for the bulls than the final numbers may have shown.
The NASDAQ lost 166 points to close at 13,453 but the S&P closed almost unchanged, losing just 2.7 points to close at 4459, still above 4450. The Dow Jones rose 249 points, closing at 35,160.
Let’s review Wednesday’s closing technical indicators to see what to expect for Thu Apr 21 2022.
Stock Market Outlook Chart Comments At The Close on Wed Apr 20 2022
On Wednesday the closing candlestick was bearish for Thursday but closed at the 100 day moving average, back above the 200 day.
The 21 day moving average continued to move sideways which is bearish.
Meanwhile the Bollinger Bands are into a squeeze which is still looking bearish.
The 200 day moving average is rising above the 4400 level which is bullish. The 50 day moving average is still at the 200 day. A drop below it will be another down signal. That could happen as early as Thursday, if the index ends the day lower.
The 100 day moving average is also dipping lower.
The chart is still about 80% bearish for Thursday but with Wednesday still virtually unchanged by the close, this builds strength for Thursday to push higher.
Stock Market Outlook review of Wed Apr 20 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal Friday April 8. On Wednesday the down signal lost some strength. The histogram also lost strength. Overall though the signals are still quite bearish but a lot of the down signal is gone from April 18 when the signal was negative 17.31.
- 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 for a third day.
- 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 stronger up signal in place for a fourth day.
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 unchanged but still 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 unchanged indicating prices are not expected to change by much on Thursday and/or Friday.
- 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:
4650 is resistance
4640 is resistance
4625 is resistance
4600 is strong resistance
4590 is resistance
4575 is light resistance
4560 is light resistance
4550 is light resistance
4525 is light resistance
4500 is light resistance
4490 is light support
4475 is light support
4450 is light support
4400 is support
4370 is light support
4350 is light support.
4300 is good support
Stock Market Outlook for Tomorrow – Thu Apr 21 2022
For Thursday the technical indicators are as bullish as they were for Wednesday which is a plus for a higher day.
A big move higher is not expected, looking at the technical indicators, but a slightly higher day is more likely than a large down day. Watch for dips and more choppy trading but a bias to the upside for Thursday.
If Netflix rises on Thursday rather than fall lower, the market has a better chance of a positive day. Tesla’s earnings were better than analysts had expected and that could also help stocks move higher. Also investors are back buying financial stocks which just days before were being dumped. That is also positive for stocks.
Existing home sales on Wednesday surprised with their strength, again proving that perhaps analysts are being too pessimistic. The Fed’s beige book did not provide any surprises which was also good on Wednesday afternoon.
Potential Market Moving Events
Thursday:
8:30 Initial jobless claims and continuing jobless claims
8:30 Philadelphia Fed manufacturing survey
10:00 Leading economic indicators
12:30 St Louis Fed Bullard speaks (nothing new expected)
1:00 Fed Chair Powell speaks on global economy to IMF (nothing new expected but could see market shift slightly depending on what is said)
Friday:
9:45 S&P global US manufacturing PMI and US services PMI
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