On Monday stocks reached 4299 and ran into sellers. Volume was low again on Monday which helped the market close lower but just several points.
The S&P fell 8 points to end the day at 4273.
The NASDAQ fell 11 points ending the day at 13,229.
After last week’s big move higher, some selling should be expected.
Let’s review the SPX closing technical indicators on Mon Jun 5 2023 to see if investors should prepare for further selling on Tuesday Jun 6.
Stock Market Outlook Chart Comments At The Close on Mon Jun 5 2023
The index closed lower and left behind a bearish candlestick for Tuesday.
The SPX continues above the 21 day moving average and is pressuring the Upper Bollinger Band higher. This is bullish.
The 100 day moving average moved above the Lower Bollinger Band on Thursday and continued higher on Monday which is also bullish.
The Lower Bollinger Band is also starting to turn up which is another bullish signal.
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 rally has the market overbought and due for some weakness.
There are 7 up signal since January and no down signal in the chart.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is unchanged 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 strengthened on Monday. The MACD histogram also gained 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 falling 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 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 falling 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.
- 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:
4310 is resistance
4300 is resistance
4290 is resistance
4275 is resistance
4250 is resistance
4240 is resistance
4225 is resistance
4210 is resistance
4200 is resistance
4190 is resistance
4180 is resistance
4175 is resistance
4150 is resistance
4135 is support
4125 is support
4100 is support
Stock Market Outlook for Tue Jun 6 2023
For Tuesday the S&P technical indicators are pointing to aanother day of weakness with dips likely along with a lower close. After a strong rally for the prior week, selling on Monday and Tuesday is not unusual and while analysts are calling for a pullback, no one can say with certainty when any pullback will occur. For now, the index looks steady as it deals with some selling after an impressive rally which has the index back at 4300.
The index could move above 4300 on Tuesday but a lower close is still expected which stocks deal with an overbought market.
Potential Economic and Political Market Moving Events
This is a fairly light week for market moving events. That should help the bulls push above 4300.
There are no events scheduled that would affect market movements.