On Monday markets reacted negatively at the open and fell to 4072 several times before moving back above 4100 to close at 4109, up 4 points on the day. The NASDAQ closed down 3 points to end the day at 12084. While the close was almost identical to Friday’s, there were large swings in the market as investors struggled to determine whether the Fed would raise rates further next month based on the March jobs numbers that still showed strong employment,
Volume on Monday was below average as many investors were not trading after the long holiday weekend. Tuesday will see higher volumes and higher volatility.
Let’s review the closing technical indicators from Mon Apr 10 2023 to see what we should expect for Tue Apr 11 2023.
Stock Market Outlook Chart Comments At The Close on Mon Apr 10 2023
The index closed with a bullish candlestick for Tuesday along with more signals advising the index is still overbought.
The Upper Bollinger Band is turning up and the Lower Bollinger Band is turning sideways. Both are bullish signals.
The 200 day moving average is at 4000 and climbing which is bullish. The 21 day is above the 100 day.
The 50 day continues above the 200 day which is bullish. The 100 day is moving sideways just below the 21 day which is the only bearish signal from the moving averages.
If you look at the list of down and up signals, there are now just 2 down signals in play with the most important being the April 24 down signal. That signal is now almost a year old and is a prime reason many analysts still believe this is a bear market. There are 4 up signal since January. The SPX chart is warning that Wednesday will see dips again as the markets remain overbought.
Stock Market Outlook review of Mon Apr 10 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is dipping and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) up signal from Mar 21 gained strength. The histogram is also higher.
- 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. It is signaling overbought.
- 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 weak down signal in place. It is also signaling 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 rising and positive. It is also 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 rising and positive. It is signaling a move higher for the start of the week.
- 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:
4150 is resstance
4135 is resistance
4125 is resistance
4100 is resistance
4090 is resistance
4075 is resistance
4050 is resistance
4030 is light support
4025 is light support
4000 is support
3975 is light support
3965 is light support
3950 is good support
3930 is light support
3900 is good support
Stock Market Outlook for Tue Apr 11 2023
For Tuesday the index is still signaling as overbought and dips are once more likely. A move as low as 4070 is not expected but if the index falls that low on Tuesday, it could move down to 4050 so stay cautious.
The indicators are not pointing lower however which is why I do not expect the SPX to fall lower.
Tuesday looks like a choppier day will develop but the outlook is still higher by the close.
Potential Economic and Political Market Moving Events
Tuesday:
6:00 NFIB optimism index is expected to slip lower, to 89.9 which is not significantly below than the previous reading of 90.9