On Monday markets moved higher as investors jumped into stocks believing the Fed will not raise interest rates on Wednesday.
By the end of the day the SPX was at a new 52 week high, closing up 40 points to end the day at 4338 and into strong resistance levels.
The NASDAQ rose 202 points to end the day at 13462.
Let’s review the SPX closing technical indicators from Mon Jun 12 2023 to see what to expect for Tue Jun 13 2023.
Stock Market Outlook Chart Comments At The Close on Mon Jun 12 2023
The index pushed above 4300 in a wider rally encompassing more stocks but still on low volume. The close saw the SPX at a 52 week high.
The SPX continues above the 21 day moving average and is just inside the Upper Bollinger Band. This is bullish.
The 100 day moving average continued higher on Monday moving further away from the Lower Bollinger Band. This is bullish
The Lower Bollinger Band is turning lower which is bullish.
The 21, 50, 100 and 200 day moving averages are rising which is bullish.
The S&P chart is more bullish than bearish but continues to warn that the market is overbought.
There are no down signals in the chart.
Stock Market Outlook review of Mon Jun 12 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and 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 Friday May 26. The up signal was stronger on Monday. The MACD histogram was also stronger.
- 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. It is very 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 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 indicating a higher day for Tuesday.
- 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 |
| 4325 is resistance |
| 4310 is resistance |
| 4300 is resistance |
| 4290 is resistance |
| 4275 is resistance |
| 4250 is resistance |
| 4240 is resistance |
| 4225 is support |
| 4210 is support |
| 4200 is support |
| 4190 is support |
| 4180 is support |
Stock Market Outlook for Tue Jun 13 2023
The technical indicators are more bullish for Tuesday than they were for Monday. The index though is becoming very overbought and dips are becoming more likely.
However even with dips on Tuesday, the outlook is still higher as more investors place capital back into stocks in the belief that a new bull market is underway since the index is better than 20% above the October 2022 market lows. Whether they are right, we will see as the summer progresses.
For Tuesday expect a choppy day with overbought dips likely but a higher close. Investors get Consumer Price Index reports today. Any large miss in the reports (see below for a list of reports) would bring weakness into the market.
Potential Economic and Political Market Moving Events
This week the big event is on Wednesday afternoon when the Fed announces the decision on interest rates.
Tuesday:
8:30 Consumer Price Index is expected to come in at 0.1%, lower than the prior 0.4%
8:30 Core CPI is expected to remain at 0.4%, unchanged.
8:30 CPI year-over-year is expected at 4%, down from 4.9%
8:30 Core CPI year-over-year is expected to be 5.3% down slightly from 5.5%