On Fri Jan 13 investors the day opened lower on the back of bank earnings being released. The dip though was down to just 3950. Buying were buying stocks within 10 minutes of the open and the index spent the day recovering and pushing higher. Near the close the SPX moved above 4000 but closed at 3999, signaling what to expect this week.
The NASDAQ climbed 78 points to closed above 11,000 for a second day. The day ended at 11079.
It was an impressive ending to a strong week. It also saw a new up signal on the SPX.
Let’s review the closing technical indicators from the SPX on Fri Jan 13 to see what to expect for Tue Jan 17 2023
Stock Market Outlook Chart Comments At The Close on Fri Jan 13 2023
Historically the day after the Martin Luther King Jr. Day has been almost equally 50% up and 50% down so relying on history is not going to help much on Tuesday.
On Fri Jan 13 the S&P closed above the 21, 50, 100 and 200 day moving averages. This is bullish.
The closing candlestick is bullish for Tuesday but also signals that stocks are overbought.
The Upper Bollinger Band is starting to turn lower which is a concern but the Lower Bollinger Band is trending sideways which remains bullish.
The 200 and 100 day moving averages are falling which is bearish but the 21 day is turning back up and the 50 day moved above the 100 day which is a new up signal to start the week. This up signal ends the down signal from Dec 30.
At present there are are 5 down signals in place since April 24 and one up signal.
The chart is 50% bearish for Tuesday.
Stock Market Outlook review of Fri Jan 13 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling but very positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday Jan 9. The up signal was stronger Friday. The histogram also is gaining strength.
- 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 trending sideways and positive. It has reached overbought readings.
- 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 and rising sharply. It too is 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 into overbought readings for a third day.
- 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 moving sideways and not quite 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:
4050 is resistance
4030 is resistance
4025 is resistance
4000 is resistance
3975 is resistance
3965 is resistance
3950 is resistance
3925 is light support
3900 is light support
3875 is light support
3850 is good support
3830 is good support
3810 is light support
3800 is good support
3775 is good support
3750 is good support
3730 is light support
3725 is light support
3715 is light support
3700 is good support
3685 is light support
Stock Market Outlook for Tomorrow – Tue Jan 17 2023
For Tuesday Jan 17, the SPX will see some dips which could be as low as 3970 but with a new up signal on Friday and the index at the 200 day moving average, the outlook remains bullish. The index should close over the 4000 level.
The market remains bullish at least until Wednesday when investors start getting retail sales, the producer price index, industrial production, business inventories and the Fed’s Beige Book.
Potential Economic and Political Market Moving Events
Tuesday:
8:30 Empire state manufacturing index
Stock Market Outlook Archives
Stock Market Outlook for Fri Apr 19 2024 – Deeply Oversold – Bounce Likely – Higher Close
Morning Investing Strategy Notes for Thu Apr 18 2024
Stock Market Outlook for Thu Apr 18 2024 – Deeply Oversold – Bounce Attempt Expected
Morning Investing Strategy Notes for Wed Apr 17 2024
Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt
Morning Investing Strategy Notes for Tue Apr 16 2024
Stock Market Outlook for Tue Apr 16 2024 – Deeply Oversold
Morning Investing Strategy Notes for Mon Apr 15 2024
Stock Market Outlook for Mon Apr 15 2024 – Expect A Bounce
Morning Investing Strategy Notes for Fri Apr 12 2024
Stock Market Outlook for Fri Apr 12 2024 – All About Bank Earnings
Morning Investing Strategy Notes for Thu Apr 11 2024
Stock Market Outlook for Thu Apr 11 2024 – Weakness and Lower
Morning Investing Strategy Notes for Wed Apr 10 2024
Stock Market Outlook for Wed Apr 10 2024 – All About The CPI Numbers
