Monday saw investors test the 4370 support level in the S&P in two large drops intraday. The first over the lunch hour and the second late in the afternoon. Each time buyers returned and sent the index back. Several times during the day the S&P turned positive. By the close the index was almost unchanged having lost less than a single point to close at 4391.
The NASDAQ had large swings as well, at one point over the lunch hour dipping below 13240 but then climbing back. By the close of the day the index was down just 18 points to 13,332.
Let’s review Monday’s closing technical indicators to see what to expect for Tue Apr 19 2022.
Stock Market Outlook Chart Comments At The Close on Mon Apr 18 2022
On Monday the 21 day moving average continued to move sideways which is bearish.
The closing candlestick is bearish as it fell below the 200 day moving average. Often though this candlestick is seen before a bounce attempt. Considering that the candlestick touched the Lower Bollinger Band and then bounced intraday, there is a good chance Tuesday may see a bounce higher.
Meanwhile the Bollinger Bands are into a squeeze which is still looking bearish.
The 200 day moving average is rising above the 4400 level which is bullish. The 50 day moving average is now at the 200 day. A drop below it will be another down signal. That could happen as early as Tuesday, if the index ends the day lower.
The 100 day moving average is also dipping lower.
The chart is about 90% bearish for Tuesday but there is one bounce signal from the closing candlestick.
Stock Market Outlook review of Mon Apr 18 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is unchanged and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal Friday April 8. On Monday the down signal strengthened further. The histogram also is strongly negative.
- 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 starting to rise.
- 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 up signal in place for a second day and is 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 back toward oversold.
- 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 investors should expect lower prices but not large price swings.
- 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:
4650 is resistance
4640 is resistance
4625 is resistance
4600 is strong resistance
4590 is resistance
4575 is light resistance
4560 is light resistance
4550 is light resistance
4525 is light resistance
4500 is light resistance
4490 is light support
4475 is light support
4450 is light support
4400 is support
4370 is light support
4350 is light support.
4300 is good support
Stock Market Outlook for Tomorrow – Tue Apr 19 2022
For Tuesday the technical indicators are a bit more mixed. The chart however is decidedly bearish except for the closing candlestick which points to a potential bounce attempt on Tuesday. The chance of a bounce attempt holding though is slim at present.
There are two technical indicators that also suggest a bounce could occur. MACD though continues to grow in strength and there is a chance the 50 day moving average may fall below the 200 day for a new down signal. Overall the index continues to look bearish.
For Tuesday the outlook is for a potential bounce but the bearishness remains.
On Tuesday we get building permits and housing starts which may impact the opening if they are relatively flat at 1.82 million for permits and 1.73 million for housing starts. A number well below that could spark a dip on fears of a potential recession looming while a large enough number above it may be seen as inflationary.
Potential Market Moving Events
Monday:
10:00 Home builders index came in at 77 which met estimates and was only slightly lower than the previous 79.
Tuesday:
8:30 Building permits
8:30 Housing starts
Wednesday:
10:00 Existing home sales
10:30 to 1:00 – 3 different Fed Presidents speak at different events
2:00 Fed Beige Book released
Thursday:
8:30 Initial jobless claims and continuing jobless claims
8:30 Philadelphia Fed manufacturing survey
10:00 Leading economic indicators
12:30 St Louis Fed Bullard speaks (nothing new expected)
1:00 Fed Chair Powell speaks on global economy to IMF (nothing new expected but could see market shift slightly depending on what is said)
Friday:
9:45 S&P global US manufacturing PMI and US services PMI
Stock Market Outlook Archives
Stock Market Outlook for Fri May 3 2024 – All About The April Non-Farm Payroll Report
Morning Investing Strategy Notes for Thu May 2 2024
Stock Market Outlook for Thu May 2 2024 – Potential Bounce But Lower
Morning Investing Strategy Notes for Wed May 1 2024
Stock Market Outlook for Wed May 1 2024 – Bounce But Lower – Fed Interest Rate Decision
Morning Investing Strategy Notes for Tue Apr 30 2024
Stock Market Outlook for Tue Apr 30 2024 – Dips Likely – Flat To Higher Close
Morning Investing Strategy Notes for Mon Apr 29 2024
Stock Market Outlook for Mon Apr 29 2024 – Some Weakness But Higher
Morning Investing Strategy Notes for Fri Apr 26 2024
Stock Market Outlook for Fri Apr 26 2024 – Higher and Positive Close
Morning Investing Strategy Notes for Thu Apr 25 2024
Stock Market Outlook for Thu Apr 25 2024 – Weakness and Lower
Morning Investing Strategy Notes for Wed Apr 24 2024
Stock Market Outlook for Wed Apr 24 2024 – Some Weakness But Higher Close
