On Wednesday indexes moved higher thanks to better than expected earnings from Target Stock combined with a belief the debt ceiling will get resolved ahead of a possible default.
The S&P closed up 49 points to 4158 and the NASDAQ rose 157 points, ending the day at 12,500. Trading volumes rose to their highest level of the week.
Let’s review the SPX closing technical indicators on Wednesday to see what to expect for Thu May 18 2023.
Stock Market Outlook Chart Comments At The Close on Wed May 17 2023
The index closed with a bullish candlestick for Thursday.
The SPX closed above the 21 day moving average which is bullish.
The Bollinger Bands Squeeze is continuing and looks steady to see stocks eventually move higher. The 50 day moved above the Lower Bollinger Band which is bullish.
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 rising.
The S&P chart is more bullish than bearish for Thursday.
There are 7 up signal since January and no down signal in the chart.
Stock Market Outlook review of Wed May 17 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 was almost gone.
- 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 sharply 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 18 2023
For Thursday the technical signals are rising again and point to a higher close on Thursday. Any hint of a failure of the debt ceiling talks will see stocks dip lower however.
MACD is still holding onto its down signal but just barely.
There could be a bit of weakness in the morning on Thursday but it won’t last long.
Potential Economic and Political Market Moving Events
None of the events on Thursday are expected to impact the up market direction.
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims
10:00 Existing home sales
10:00 Leading economic indicators