Stock Market Outlook for Tue Sep 12 2023

Sep 12, 2023 | Stock Market Outlook

Prior Trading Day Summary

On Monday, stocks moved higher from the open. The lack of any economic data helped the bulls on Monday.

All 3 indexes were higher. The SPX was up 30 points to 4487. The NASDAQ rose 156 points to end the day at 13,917.

Let’s review the SPX from Mon Sep 11 2023 to see what to expect for Tue Sep 12 2023.

Stock Market Outlook: SPX Closing Chart For Mon Sep 11 2023

The index closed above the 50 day and the 21 day moving average. This is bullish.

The closing candlestick on Monday had a long shadow (tail) which signals Tuesday will normally see some selling in the morning and a dip back below the 50 day moving average.

The 50, 100 and 200 day moving averages are continuing to climb which is bullish.

The Lower Bollinger Band is moving below the 100 day which is bullish. The Upper Bollinger Band is moving sideways. The index is entering a Bollinger Bands Squeeze as of the close on Monday.

Stock Market Outlook review of Mon Sep 11 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) issued an up signal on Tue Aug 29 2023. On Mon Sep 11 2023 the up signal rose slightly.

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 down signal but is on the verge of issuing an up signal.

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.

Stock Market Outlook: Support and Resistance Levels

4600 is resistance

4575 is resistance

4550 is resistance

4525 is resistance

4500 is resistance

4485 is resistance

4470 is resistance

4450 is support

4435 is support

4420 is support

4400 is support

4390 is support

4370 is support

4350 is support

For Tuesday the technical indicators are turning back to the positive side and the Moving Average Convergence / Divergence up signal, gained some strength on Monday in the rally.

The closing just above the 50 day moving average is good news for the bulls. There will be some selling on Tuesday, probably in the morning. It will not however mark an end to the present spike higher. The day will end with the SPX higher, even if only slightly.

Wednesday investors get the core CPI numbers. That often is preceded by a rise in valuations the day before.

Potential Economic and Political Market Moving Events

This week the core CPI numbers on Wednesday and PPI numbers on Thursday will impact stocks.

Tuesday:

2:00 Federal Budget is expected to rise to -$245 billion from -$220 billion