On Wednesday the CPI reports showed a slowing of inflation although the decline was small a drop to 4.9% from 5% previous. It was enough to rally stocks. The open was higher followed by weakness after the lunch hour. But the dip after the lunch hour was followed by a rally recovering the morning strength.
The S&P closedup 18 points to close at 4137.
The NASDAQ ended up 126 points to 12306.
Let’s review the SPX closing technical indicators on Wednesday to see what to expect for Thu May 11 2023.
Stock Market Outlook Chart Comments At The Close on Wed May 10 2023
The index closed with a bullish candlestick for Thursday. However often this candlestick also signals a down day to follow so be prepared for weakness.
The SPX closed above the 21 day moving average which is bullish.
The Bollinger Bands Squeeze is continuing and looks steady to see stocks move higher.
All major moving averages are climbing which is bullish and the 100 day continued to move higher above the 200 day.
The 21 day moving average is also turning back up.
The S&P chart is bullish for Thursday.
There are 7 up signal since January and no down signal left in the chart.
Stock Market Outlook review of Wed May 10 2023
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 a down signal on Tue Apr 25 2023. That down signal lost some strength on Wednesday.
- 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 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 an up signal in place.
- 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 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 rising and positive.
- 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:
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 resistance
4125 is support
4100 is support
4090 is support
4075 is support
4050 is support
4030 is light support
4025 is light support
4000 is support
Stock Market Outlook for Thu May 11 2023
For Thursday there are signals advising strength is returning to stocks. The closing candlestick however is also warning there is a chance for a dip on Thursday.
The technical indicators are all pointing higher and the MACD indicator is ready to turn positive which would be a major up signal when it occurs.
Potential Economic and Political Market Moving Events
Today we get the Core PPI numbers
Thursday:
8:30 Producer price index
8:30 Core PPI
8:30 PPI and Core PPI year-over-year
8:30 Weekly Initial Unemployment Insurance Claims