On Monday investors digested Friday’s big rally and prepared for Wednesday’s CPI report. Markets traded primarily sideways in another day of low volume.
The S&P closed up 2 points at 4138 and the NASDAQ rose 21 points to 12,256.
Let’s review the SPX closing technical indicators on Monday to see what to expect for Tue May 9 2023
Stock Market Outlook Chart Comments At The Close on Mon May 8 2023
The index closed with a bullish candlestick for Tuesday.
The SPX stayed above the 21 day moving average which is bullish.
The Bollinger Bands Squeeze is continuing and looks steady to see stocks move higher.
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 turning back up.
The S&P chart is bullish for Tuesday.
There are 7 up signal since January and no down signal left in the chart.
Stock Market Outlook review of Mon May 8 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and back positive.
- 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 lost some 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 rising 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 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 9 2023
For Tuesday there are no changes except the up signal from the Slow Stochastic indicator. The remaining indicators are almost unchanged from Friday’s close. This is bullish for stocks. Tuesday could see a similar day with a slight gain or loss but the next move will come on Wednesday when the latest inflation news is released.
Potential Economic and Political Market Moving Events
For this week Wednesday provides the latest Core CPI and Thursday the Core PPI. Either could be market moving events. Overall though the bias is up from an economic events perspective.
Tuesday:
No events of any significant.