On Mon Nov 28 2022 indexes fell further than anticipated as investors remained concerned that the protests in China could widen.
The S&P ended the day down 62 points to 3963. The NASDAQ closed down 176 points to end the day at 11049. Semi conductors led the NASDAQ lower.
Volumes though were not high which often indicates a bounce back could occur shortly.
Let’s review the closing SPX technical indicators from Monday to see what to expect on Tuesday.
Stock Market Outlook Chart Comments At The Close on Mon Nov 28 2022
On Monday the S&P closing candlestick ended the day below the 200 day moving average. The candlestick is bearish for Tuesday.
The closing candlestick is still above the 21, 50 and 100 day moving averages which is bullish.
The Upper Bollinger Band crossed above the 200 day on Wednesday November 16 which is a bullish signal. On Monday though it turned sideways.
The Lower Bollinger Band is starting to turn higher which at present is bullish.
A new up signal was generated on Friday Nov 11 as the 21 day moving average is back above the 50 day. This is bullish. The 21 day is continuing to rise and is at the 100 day moving average. We may see a new up signal on Tuesday or Wednesday.
The 50, 100 and 200 day moving averages are all turning sideways which is bullish.
There are 6 down signals in place since April and one up signal.
The chart is 60% bullish for Tuesday.
Stock Market Outlook review of Mon Nov 28 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thursday Oct 16. On Monday the up signal was cut in half. The histogram also lost much of its 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 falling.
- 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 down 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 falling and negative.
- 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 but 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
4070 is resistance
4050 is resistance
4030 is resistance
4025 is resistance
4000 is resistance
3975 is resistance
3965 is resistance
3950 is resistance
3925 is light support
3900 is light support
3875 is light support
3850 is light support
3825 is light support
3800 is good support
Stock Market Outlook for Tomorrow – Tue Nov 29 2022
For Tuesday the S&P is started the day weaker than expected but we could see a bounce attempt at or near the open. It probably won’t hold but the fact that the S&P closed above 3950 was a good sign on Monday. Few investors expected the S&P would simply push beyond 4000 without a number of retests. Monday may end up being a retest.
The technical indicators are shifting quickly to the downside with half of them showing negative readings. The other half though are still trying to hold positive signals but all are weaker.
For Tuesday there is a good chance the market will try to bounce. It will probably fail but it is a good sign that a second bounce attempt may still be in the works for later in the day or in the week.
Watch for a bounce at the open, then weakness and then a second bounce. I will be watching volume on Tuesday to see if it picks up on bounces. That often is a signal that an upside bounce may have some staying power.
Potential Economic and Political Market Moving Events
On Wednesday we get a number of economic reports and the Fed’s Beige Book. On Thursday inflation reports will impact the markets and on Friday we get the November non-farm payroll numbers.
Tuesday:
9:00 Case-Shiller home price index
10:00 Consumer confidence index which is expected to come in at 100, down just slightly from 102.5
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