Day’s Summary
On Monday investors faced economic woes out of China as well as still rising Treasury yields. While the morning saw continued weakness, the afternoon had a sustained rally that moved the S&P 30 points to close at 4406.
The NASDAQ rose 206 points to end the day at 13,497.
It was the best day in August for both indexes, but by the close, the technical outlook had not changed its bearish stance.
Let’s review the SPX index from Monday to see what to expect for Tue Aug 22 2023.
Stock Market Outlook: SPX Closing Chart For Mon Aug 21 2023
The index touched the 100 day moving average on Friday leaving the index deeply oversold. On Monday, a bounce occurred from stocks being heavily oversold.
The closing candlestick on Monday is still bearish indicating that Monday was a bearish bounce.
The 21 day moving average continued falling sharply. The 50, 100 and 200 day moving averages are continuing to climb which is bullish but the 50 day will start to turn lower this week unless the market can bounce..
The Lower Bollinger Band is still falling which is bearish. The Upper Bollinger Band is turning lower which advises that Monday’s move higher was simply a bounce. The Lower Bollinger Band continued to fall which is bearish.
Stock Market Outlook review of Mon Aug 21 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and negative. It is signaling extremely oversold.
|
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thursday Jul 27. On Mon Aug 21 the down signal was stronger. It is at a level where often we will see a strong bounce.
|
Ultimate Oscillator: The Ultimate Oscillator is unchanged, negative and oversold.
|
Slow Stochastic: The Slow Stochastic has an up signal in place. It is extremely oversold and signaling a bounce is coming.
|
Relative Strength Index: The RSI signal is rising sharply and oversold.
|
Rate of Change: The rate of change signal is rising and deeply oversold.
|
Stock Market Outlook: Support and Resistance Levels |
| 4600 is resistance |
| 4575 is resistance |
| 4550 is resistance |
| 4525 is resistance |
| 4500 is resistance |
| 4485 is resistance |
| 4470 is resistance |
| 4450 is resistance |
| 4435 is support |
| 4420 is support |
| 4400 is support |
| 4390 is support |
| 4370 is support |
| 4350 is support |
| 4340 is support |
| 4325 is support |
| 4310 is support |
| 4300 is support |
| 4290 is support |
| 4275 is support |
| 4250 is support |
| 4240 is support |
| 4225 is support |
| 4210 is support |
| 4200 is good support |
Stock Market Outlook for Tue Aug 22 2023
Monday’s rally did not change the technical indicators by much. Most are still signaling oversold and ready to bounce any time. They also indicate Tuesday should see stocks slip and end the day flat to lower.
On Tuesday watch for a continuation of the bounce in the morning but keep your eye on Treasury yields again. If they rise further, stocks will move lower. But, if yields dip, even slightly, stocks will rally.
Potential Economic and Political Market Moving Events
The big event this week is the Jackson Hole summit
Tuesday:
10:00 Existing home sales are expected to be 4.15 million, lower by 100,000