On Monday the S&P and NASDAQ spent much of the day moving sideways but held onto a bullish bias as investors wait on the latest news for a deal on the debt ceiling.
By the end of the day the S&P was virtually unchanged. The NASDAQ added 62 points to close at 12,720.
Let’s review the SPX closing technical indicators on Mon May 22 to see what to expect for Tue May 23 2023.
Stock Market Outlook Chart Comments At The Close on Mon May 22 2023
The index closed with a bullish candlestick for Tuesday.
The SPX closed above the 21 day moving average and at the Upper Bollinger Band which is bullish.
The Bollinger Bands Squeeze is ended with stocks moving higher.
The 100 day moving average pushed above the Lower Bollinger Band on Monday. This is bullish.
All major moving averages are climbing which is bullish.
The S&P chart is more bullish than bearish for Tuesday.
There are 7 up signal since January and no down signal in the chart.
Stock Market Outlook review of Mon May 22 2023
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) gained more strength on Monday.
- 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 and 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 unchanged and 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 falling slightly and 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 23 2023
For Tuesday there are few changes in the technical indicators from Monday’s outlook. Stocks are expected to continue to move sideways but stay with a bullish bias while waiting for a resolution to the debt ceiling.
Just as we saw on Monday, Tuesday will see dips, probably more in the morning than in the afternoon but the close could see the index flat to slightly higher. Even if Tuesday closes lower, the outlook remains bullish.
Potential Economic and Political Market Moving Events
None of the events listed below should impact stocks on Tuesday.
Tuesday:
9:45 S&P flash services PMI
9:45 S&P flash manufacturing PMI
10:00 New Home sales are expected to do-p to 665,000 from 683,000.