On Monday investors started the day selling stocks lower but within half an hour that ended and stocks spent the rest of the day climbing higher despite continuing concerns over the Debt Ceiling. One thing that did not happen over the weekend was another bank collapse which had been predicted by a number of analysts. That seem to embolden some buyers although by the close, volume was still below average.
The S&P closed up 12 points to 4136 and the NASDAQ gained 80 points, ending the day at 12,365.
Let’s review the SPX closing technical indicators on Monday to see what to expect for Tue May 16 2023.
Stock Market Outlook Chart Comments At The Close on Mon May 15 2023
The index closed with a bullish candlestick for Tuesday although it also predicted some weakness intraday but the close should be higher.
The SPX closed just above the 21 day moving average which is bullish.
The Bollinger Bands Squeeze is continuing and looks steady to see stocks eventually move higher. The 50 day reached the Lower Bollinger Band which is bullish.
All major moving averages are climbing which is bullish and the 100 day continued to move higher above the 200 day.
The 21 day moving average is also rising.
The S&P chart is more bullish for Tuesday.
There are 7 up signal since January and no down signal in the chart.
Stock Market Outlook review of Mon May 15 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative as trading volumes are declining.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tue Apr 25 2023. That down signal was almost gone on Monday and the histogram is set to turn 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 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 a neutral 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 back 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 ready to turn 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:
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 resistance
4125 is support
4100 is support
4090 is support
4075 is support
4050 is support
4030 is light support
4025 is light support
4000 is support
Stock Market Outlook for Tue May 16 2023
For Tuesday the technical signals are trying to build some strength back to the upside. Trading volumes remain very low which is a concern.
MACD is ready to issue an up signal as the down signal is almost gone.
The index will see some weakness on Tuesday but the end will be higher.
The debt ceiling talks continue to keep many investors to the sidelines as they wait for the two sides to come together with a resolution. Once there is a resolution, expect the index to pop.
Potential Economic and Political Market Moving Events
Lots of economic reports on Tuesday that could move stocks.
Monday:
8:30 Empire State Manufacturing survey came in at a stunning -31.8 rather than the expected -5.0. This was taken by investors to advise the likelihood of a recession is growing.
Tuesday:
8:30 US Retail Sale are expected to rise 0.8%
8:30 Retail sales minus autos are expected to rise 0.4%
9:15 Industrial Production is expected to decline to 0.1%
9:15 Capacity Utilization is expected to be unchanged at 79.7%
10:00 Business inventories are expected to be flat at 0.0%
10:00 Home Builder Confidence Index is expected to remain at 45