Banking fears continued to dominate the markets despite attempts to rescue First Republic and the purchase of Credit Suisse in Europe. The day though ended higher for much of the market as investors shunned financial stocks.
By the close the S&P was up 35 points to end the day at 3951. The NASDAQ was up 45 points to end the day at 11,675.
Let’s review the closing technical indicators from Mon Mar 20 2023 to see what we should expect for Tue Mar 21 2023 with the Fed’s next rate decision set to be released on Wednesday.
Stock Market Outlook Chart Comments At The Close on Mon Mar 20 2023
The index closed with a bullish candlestick for Tuesday.
The Upper Bollinger Band is turning down which is a bearish signal. The Lower Bollinger Band is turning higher which is a bullish signal but could be starting a signal of an impending Bollinger Bands Squeeze this week.
The 200 day moving average is falling back which is bearish. The 21 day is continuing to descend after generating a down signal on Friday. It is below all major moving averages again.
On Thursday we also received an up signal with the 50 day moving above the 200 day. This is bullish although the 50 day is back falling on Monday.
At present there are 4 down signals in place since April 24 and 3 up signals since Jan 13.
The chart is though is slightly bullish for Tuesday ahead of the much anticipated Fed’s interest rate decision.
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) down signal lost more strength on Monday. The histogram also lost 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 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 and still climbing indicating Tuesday should be higher.
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.
- 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 and negative as it moves away from oversold.
- 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:
4100 is resistance
4090 is resistance
4075 is resistance
4050 is resistance
4030 is resistance
4025 is resistance
4000 is resistance
3975 is light support
3965 is light support
3950 is good support
3930 is light support
3900 is good support
3870 is light support
3850 is good support
3825 is light support
3810 is light support
3800 is good support
3775 is good support
Stock Market Outlook for Tue Mar 21 2023
For Tuesday the technical indicators are slightly more bullish than they were heading into Monday. A choppy day is still expected ahead of tomorrow’s Fed interest rate decision but historically, the day prior is either flat to higher.
Tuesday should see the index end slightly higher.
Potential Economic and Political Market Moving Events
The big event for the week is on Wednesday when the Fed releases what is expected to be a quarter point rate increase.
10:00 Existing home sales are expected to rise to 4.2 million from 4.0 million.
Stock Market Outlook Archives