Wednesday saw another meltdown in the morning as Credit Suisse Bank seemed to be the next in-line for a collapse. With stocks plummeting both in Europe and North America, news of a probable backing for the bank stopped the selling and the index recovered much of the day’s losses by the close.
By the close the S&P was down 27 points to close at 3891. The NASDAQ closed positive, up 6 points to close at 11434.
After hours the picture remained mixed as a report seemed to indicate that Credit Suisse would be borrowing almost $54 billion from Swiss National Bank. Other persons “in the know” suggested there were no ongoing discussions.
The recovery though was excellent and still shows there are investors using the drops over the past several trading days to selectively pick though stocks which is usually a bullish sign, even if it ends up being too early.
Let’s review the closing technical indicators from Wed Mar 15 to see what we should expect for Thu Mar 16.
Stock Market Outlook Chart Comments At The Close on Wed Mar 15 2023
On Wednesday the S&P closed above the Lower Bollinger Band but below all moving averages. This is bearish. The drop though, as you can see in the SPX chart below, was not as deep as the drop on Monday which remains the low.
The index closed with a bearish outlook forThursday with a candlestick pointing to more selling pressure on Thursday.
The Upper Bollinger Band is turning down while the Lower Bollinger Band is also turning down. Both are bearish signals.
The 200 day moving average is falling back which is bearish. The 21 day is fell to the 200 day on Tuesday and below the 50 day on Wednesday for a third another down signal. This signal wipes out the up signal from Jan 30.
The 50 day moving average is also turning lower with the 100 day also dropping.
At present there are three down signals in place since April 24 and 3 up signals since Jan 13.
The chart is bearish for Thursday but also points to the potential for a bounce, especially with ore positive regarding a rescue for Credit Suisse.
Stock Market Outlook review of Wed Mar 15 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) down signal lost some strength on Wednesday. The histogram also showed further weakness to the down signal.
- 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 and negative. It is not 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 an up signal in place and is still 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..
- 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, negative and oversold.
- 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:
4100 is resistance
4090 is resistance
4075 is resistance
4050 is resistance
4030 is resistance
4025 is resistance
4000 is resistance
3975 is light support
3965 is light support
3950 is good support
3930 is light support
3900 is good support
3870 is light support
3850 is good support
3825 is light support
3810 is light support
3800 is good support
3775 is good support
Stock Market Outlook for Thu Mar 16 2023
For Thursday we should see a higher open with positive news being released regarding a large rescue package for Credit Suisse. There was another down signal in the S&P chart but much of these down signals is being caused by investor panic. This can be seen with MACD continuing to lose the down signal despite the S&P signals lower. Emotions are running high and that is creating a mixed outlook.
There will be selling on Thursday but there is a good chance the index could close higher unless there are further financial worries for investors to focus on today.
Potential Economic and Political Market Moving Events
Today we get further economic reports which could move markets although with the focus on a probable rescue for Credit Suisse we may see limited movement based on the economic reports listed below.
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims are expected to be 205,000
8:30 Import Price Index
8:30 Housing Starts
8:30 Building Permits
8:30 Core PPI year-over-year
8:30 Philadelphia Fed manufacturing
Stock Market Outlook Archives
Stock Market Outlook for Tue Apr 23 2024 – Bounce But Lower
Morning Investing Strategy Notes for Mon Apr 22 2024
Stock Market Outlook for Mon Apr 22 2024 – No Change – Deeply Oversold Bounce Possible
Morning Investing Strategy Notes for Fri Apr 19 2024
Stock Market Outlook for Fri Apr 19 2024 – Deeply Oversold – Bounce Likely – Higher Close
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
