Stock Market Outlook for Tue Mar 28 2023 – Choppy Bias Higher

On Monday stocks faced a choppy session which ended slightly higher by 6 points but held the gains made on Friday and that was the primary goal for Monday.

The NASDAQ closed down 55 points.

With many analysts believing the worse of the banking crisis was being contained, investors were buying the financial sector on Monday.

Let’s review the closing technical indicators from Mon Mar 27 2023 to see what we should expect for Tue Mar 28 2023.

Stock Market Outlook Chart Comments At The Close on Mon Mar 27 2023 

The index closed with a bullish candlestick for Tuesday. There are long shadows in Monday’s candlestick and often that signals a choppy day lies ahead.

The Upper Bollinger Band is moving sideways which is a bearish signal. The Lower Bollinger Band is also turning sideways. There is no signal up or down as of Monday’s close in the latest Bollinger Bands Squeeze.

The 200 day moving average is falling which is bearish. The 21 day is continuing to descend after generating a down signal on Friday Mar 17. It is below all major moving averages.

Meanwhile the 50 day has turned sideways but is holding above the 200 day. This is still bullish. The 100 day is moving sideways above the 21 day. This is bearish.

At present there are 4 down signals in place since April 24 and 3 up signals since Jan 13.

The chart is more bearish than bullish for Tuesday.

Stock Market Outlook review of Mon Mar 27 2023

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising and positive.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) up signal from Mar 21 gained more strength. The histogram is also 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 falling and negative.

• 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.

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 slightly positive.

• 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 28 2023 

For Tuesday the technical indicators held Friday’s gains which was important. The MACD up signal also gained strength which is also important.

Tuesday’s technical indicators are biased to the bullish side while the chart is more bearish than bullish. Overall I am expecting a choppy day with dips but again a higher close.

Potential Economic and Political Market Moving Events

Tuesday:

8:30 Advanced retail inventories

8:30 Advanced wholesale inventories

9:00 S&P case Shiller home price index which is expected to come in at 2.5%

10:00 Consumer confidence which is expected to be 101.3 showing continued strength

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