Monday saw indexes hold most of their gains from Friday’s massive rally. This is bullish.
The S&P lost just 11 points and closed at 3900.
The NASDAQ lost 83 points to close at 11524.
Most of the day on Monday was choppy with many stocks moving sideways rather up or down.
Let’s review Monday’s market action to see what the closing technical indicators can tell us to expect on Tuesday.
Stock Market Outlook Chart Comments At The Close on Mon Jun 27 2022
On Monday the closing candlestick is bearish for Tuesday and indicates the 21 day moving average is holding the index back from advancing.
The Upper Bollinger Band is no longer climbing. The 200 day is still falling but note how the 100 and 50 day moving average averages are turning sideways while the 21 day is ready to turn higher.
The Lower Bollinger Band is still falling which is bearish.
The chart looks about the same as it did on Friday at the close.
There are 4 down signals still in place and there have been no up signals since the start of April. It would be good to see the Bollinger Bands turn higher.
The chart is 70% bearish for Tuesday with a slight indication that the S&P will close at or above 3900 again.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and neutral. It is no longer oversold.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Monday June 13. On Monday a new unconfirmed up signal was issued. The MACD histogram turned positive.
- 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 toward 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 is rising.
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.
- 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.
- 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:
4200 is light resistance
4150 is light resistance
4100 is light resistance
4050 is light resistance
4025 is light resistance
4000 is strong resistance
3975 is light resistance and is a decline of 17.5%
3900 is light resistance and is a decline of 19%
3850 is light resistance and is a decline of 20%
3825 is light support
3800 is good support.
3775 is light support
3750 is light support
3730 is light support
3700 is good support
3675 is light support
3650 is light support
3625 is light support
3600 is good support and is a decline of 25%
Stock Market Outlook for Tomorrow – Tue Jun 28 2022
For Tuesday the technical indicators are mixed but a new unconfirmed up signal from MACD might impact the market on Tuesday. Just as we saw on Monday, dips on Tuesday are still opportunities to set up trades.
The day looks steady with weakness again at times but a good chance for a higher close. The morning could see the most weakness as investors digest Nike earnings which were good but with mixed forward guidance.
Potential Market Moving Events
For the final week of June the biggest events are on Thursday when inflation reports are released. Any indication of even a slight slowing of inflation will see stocks rise. Any rise in inflation will send stocks lower.
Monday:
10:00 Pending home sales index came in at 0.7% which was higher than projections for a 4% decline.
Tuesday:
9:00 S&P Case-Shiller home price index (year-over-year)
10:00 Consumer Confidence Index
Wednesday:
8:30 Gross domestic product revision
9:00 Fed Chair Powell speaks at ECB Conference
Thursday:
8:30 PCE Inflation (monthly)
8:30 Core PCE Inflation (monthly)
8:30 PCE Inflation year-over-year
8:30 Core PCE Inflation year-over-year
8:30 Real disposable income
8:30 Real consumer spending
8:30 Weekly Initial Unemployment Insurance Claims
9:45 Chicago PMI
Friday:
10:00 ISM manufacturing index
10:00 Construction Spending