Monday ended up being similar to Friday. The early start of the day held promise as the index rose but when the S&P couldn’t retake 2450, selling started. At first it was light but news of shutdowns in China due to a rise in Covid cases was enough to increase selling. Just as we saw on Friday, selling was steady throughout the rest of the day with the index closing at 4173 just 12 points above the day’s intraday low. The loss was 31 points. Over the last 180 days the lowest close was 4170 on March 8. Monday’s close was just 3 points higher.
For the NASDAQ losses were much higher with a decline of 262 points and a close at 12581. This is the lowest close in 12 months leaving the index down 22% from its 52 week high.
Let’s review Monday’s closing technicals and candlestick to see what to expect for Tuesday.
Stock Market Outlook Chart Comments At The Close on Mon Mar 14 2022
There were some changes in the S&P chart following Monday’s close.
The Upper Bollinger Band is continuing to turn lower while the Lower Bollinger Band is also falling. As explained last week, if the Lower Bollinger Band falls the market will continue to see losses.
The closing candlestick on Monday is bearish but often this candlestick also predicts a bounce, even a short-term one, could occur.
The SPX now has 4 down signals in place and on Monday the 200 day also moved distinctly lower.
TAll the major moving averages are falling lower.
The chart remains bearish as of Monday’s close.
Stock Market Outlook review of Mon Mar 14 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Mon Mar 7 2022 . The down signaled strengthened on Monday. The MACD histogram also strengthened.
- 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 negative but trending sideways or unchanged.
- 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 now has a down signal in place.
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 near oversold readings.
- 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 which indicates we will see larger moves in many prices.
- 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:
4500 is resistance
4490 is light resistance
4475 is light resistance
4450 is light resistance
4400 is resistance
4370 is light resistance
4350 is light resistance
4300 is good support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
4150 is good support
4000 is good support
Stock Market Outlook for Tomorrow – Tue Mar 15 2022
For Tuesday markets may drift lower ahead of the Fed’s decision on interest rates due out Wednesday afternoon. On Tuesday we also get the producer price index for February which is expected to jump 10%.
The closing candlestick on Monday is pointing to a lower day as well for Tuesday, but it also indicates the market could bounce, even if only for a short period.
For Tuesday watch for a potential short but sharp bounce and then more selling to end the day lower.
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