On Wednesday indexes closed lower although many stocks still remained in an uptrend. On New York 56% of stocks were advancing and on the NASDAQ 51% were advancing by the close.
The S&P fell 16 points to close at 4267.
The NASDAQ fell 171 points ending the day at 13,104. This was the largest one day loss since April 25. Many analysts pointed to today’s decline in the NASDAQ as a signal the market will move lower with tech leading the way. Personally I don’t think there are enough signs yet to be able to issue such a call.
Let’s review the SPX closing technical indicators from Wed Jun 7 2023 to see what to expect for Thu Jun 8 2023.
Stock Market Outlook Chart Comments At The Close on Wed Jun 7 2023
The index closed just slightly lower and left behind a bearish candlestick for Thursday.
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 Wednesday which is bullish
The Lower Bollinger Band is also starting to turn up which is another bullish signal.
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 rally has the market overbought and due for some weakness.
There are 7 up signal since January and no down signal in the chart.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising 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 Friday May 26. The up signal was strong on Wednesday. The MACD histogram was also strong.
- 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 positive.
- 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. 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 falling 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 dips should be expected on Thursday.
- 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:
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 resistance
4175 is resistance
4150 is resistance
4135 is support
4125 is support
4100 is support
Stock Market Outlook for Thu Jun 8 2023
The technical indicators are more mixed for Thursday but in general the index still looks like it is just trying to consolidate last week’s rally. If the Fed fails to raise rates at next week’s meeting, this will be a big boost for stocks to push higher.
The S&P struggled to move above 4200 just a couple weeks ago. A rush through 4300 is out of the question as the index needs a catalyst of some kind to break through and continue higher. THat could end up happening next week.
But until the, the outlook is for more dips and weakness but with a bullish bias. Dips are likely with a possible lower close.
Potential Economic and Political Market Moving Events
This is a fairly light week for market moving events. That should help the bulls push above 4300.
8:30 Weekly Initial Unemployment Insurance Claims are expected to be 236,000, up slightly
10:00 Wholesale inventories are expected to be lower at -0.2%