On Wednesday all the “bad news” from the past several days was forgotten. Investors focused on the inflation report which they felt showed inflation is starting to slow. The early morning reports released at 8:30 was all it took to bounce the indexes at the open and send them soaring higher throughout the day. The SPX closed at the high of the day, adding 887 points to end the day at 4210 and back above the 200 day moving average for the first time since April.
The NASDAQ climbed 2.89% adding another 360 points to the index and closing at 12,854, just 146 points below 13,000. The NASDAQ closed just below the 200 day moving average. The index has not been this high since April 5.
It was a strong day for the bulls. Let’s review the closing technical indicators from Wednesday to see what to expect for Thu Aug 11 2022.
Stock Market Outlook Chart Comments At The Close on Wed Aug 10 2022
The closing candlestick is bullish for Thursday. The index closed at the high of the day and above the 200 day moving average. Both are bullish signals.
The 21 day moving average is still rising and is above the 50 day for a seventh day. The 50 day moving average is also turning higher. Both are bullish.
The first up signal since April was released Tuesday Aug 2 when the 21 day moving average crossed above the 50 day moving average.
The Upper Bollinger Band is rising and continued to move above the 200 day moving average which is bullish.
The Lower Bollinger Band is starting to climb higher again, which is bullish.
The 200 and 100 day moving average are still falling which is bearish.
There are 3 down signals still in place and one new up signal.
The chart is 85% bullish for Thursday.
Stock Market Outlook review of Wed Aug 10 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday June 27. On Wednesday the up signal gained a bit of strength. The histogram also improved slightly. Both are bullish signals.
- 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.
- 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 overbought. The down signal may turn to an up signal on Thursday.
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 back into overbought readings.
- 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.
- 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:
4300 is stronger resistance
4290 is light resistance
4275 is light resistance
4265 is light resistance
4250 is stronger resistance
4220 is light resistance
4200 is light resistance
4150 is light support
4100 is light support
4050 is light support
4025 is light support
4000 is light support
3975 is light support and is a decline of 17.5%
3900 is light support and is a decline of 19%
3850 is light support and is a decline of 20%
3825 is light resistance.
3800 is good support.
Stock Market Outlook for Tomorrow – Thu Aug 11 2022
In the support and resistance chart above you can see that support levels have expanded while there are a large number of resistance bands for the SPX to face as it tries to push toward 4300.
For Thursday the S&P chart is 85% bullish. We could see some weakness in the morning and a dip back below 4200 is likely, but the technical indicators readings are improving in strength. It will take more than one day to stay above 4200 but on Thursday we should see a higher close as the rally continues.
Potential Market Moving Events
On Wednesday you can see the inflation numbers below were lower than expected. This sparked the rally on Wednesday and should assist it to push higher on Thursday.
On Thursday investors also get the Consumer Price Index which could also help boost the rally further if it comes in lower as expected. (see below under Thursday)
Wednesday:
8:30 Consumer Price Index was 0.0% which was better than the 0.2% estimated and the 1.3% for the prior month.
8:30 Core CPI if hoped to come in at half a percent. Instead it came in at 0.3%, lower than expected.
8:30 CPI year-over-year is hoped to come in at 8.7% or lower. Instead it came in at 8.5% which was lower than expected.
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims expected to come in at 264,000
8:30 Consumer price index is estimated to be 0.2%, down from 1.1% last month.
Stock Market Outlook Archives
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Morning Investing Strategy Notes for Thu Apr 18 2024
Stock Market Outlook for Thu Apr 18 2024 – Deeply Oversold – Bounce Attempt Expected
Morning Investing Strategy Notes for Wed Apr 17 2024
Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt
Morning Investing Strategy Notes for Tue Apr 16 2024
Stock Market Outlook for Tue Apr 16 2024 – Deeply Oversold
Morning Investing Strategy Notes for Mon Apr 15 2024
Stock Market Outlook for Mon Apr 15 2024 – Expect A Bounce
Morning Investing Strategy Notes for Fri Apr 12 2024
Stock Market Outlook for Fri Apr 12 2024 – All About Bank Earnings
Morning Investing Strategy Notes for Thu Apr 11 2024
Stock Market Outlook for Thu Apr 11 2024 – Weakness and Lower
Morning Investing Strategy Notes for Wed Apr 10 2024
Stock Market Outlook for Wed Apr 10 2024 – All About The CPI Numbers
