Monday saw some dips back below 4100 but each time, selling dried up and buyers returned. By the close the index was 1% for a 43 point gain to end the day at 4110.
The NASDAQ rose 1.2% for a 154 point gain to close at 12,266.
The S&P on Monday dipped back below the 100 day moving average but closed above both the 100 and at the 50 day moving average marking a 4th straight strong day. Over the past 4 trading days the S&P has regained 202 points for a 5.1% rally.
Tuesday though, investors are treated to a number of inflation reports and that could either push the index still higher, or challenge it to hold the gains already made.
Let’s review the closing technical indicators from Monday’s rally to see what we should expect for Tuesday.
Stock Market Outlook Chart Comments At The Close on Mon Sep 12 2022
The closing candlestick on Monday is bullish but also points to a potential dip as the index is becoming overbought. Any dip, according to the candlestick, won’t be deep and won’t last.
The candlestick closed above the 50 and 100 day moving average which is bullish. It ended the day at the 21 day moving average and tried to break above it intraday. Again bullish signals.
The Bollinger Bands are indicating two possible outcomes. The Upper Bollinger Band is falling pointing to stocks as possibly nearing a top while the Lower Bollinger Band is pointing to a potential sideways to up trend continuing.
The 21 day moving average is falling further away from the 200 day and could fall below the 100 day if Tuesday ends lower. This is bearish.
The 200 day and 100 day moving averages are also falling which is bearish.
The first up signal since April was released Tuesday Aug 2 when the 21 day moving average crossed above the 50 day moving average.
The 21 day moving average moved above the 100 day moving average on Wed Aug 16 for a second major up signal.
The 50 day has been rising but is now turning sideways and could begin to fall shortly unless the index can stage a rally or a bounce.
There are now 2 down signals still in place and two up signals.
The chart is 70% bearish for Tuesday.
Stock Market Outlook review of Mon Sep 12 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and has turned 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 Monday Aug 22. On Monday the down signal took a major loss in strength. The histogram also lost strength and could turn neutral on Tuesday.
- 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 near oversold readings.
- 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 no longer oversold.
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 sharply and into overbought readings.
- 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 indicates a “steady” outlook for Tuesday.
- 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 stronger resistance
4220 is light resistance
4200 is strong resistance
4150 is light resistance
4100 is light resistance
4050 is light support
4025 is light support
4000 is light support
3975 is light support and is a decline of 17.5%
3950 is light support
3925 is light support
3900 is strong support
3875 is light support
3850 is good support
3825 is light support
3810 is good support
Stock Market Outlook for Tomorrow – Tue Sep 13 2022
For Tuesday a number of reports are released, all of which are going to give a better indication on inflation. The majority of analysts believe inflation is already turning lower. The reports on Tuesday morning will tell us if they are right. The reports as release times are below under “Potential Market Moving Events”
Aside from the economic reports on Tuesday, a number of technical indicators are moving toward overbought. As well the MACD indicator is on the verge of losing the down signal. Both of these are positive for the market.
If the inflation reports below are in-line with estimates or lower, the market will rally further. If the numbers surprise to the upside, the market will dip but depending on how “bad” the inflation numbers might point to, the index may continue to hold a bullish stance. For this reason the outlook for Tuesday remains cautiously bullish.
Potential Market Moving Events
This week we get a number of inflation reports. Watch Monday and especially Tuesday for inflation reports that could swing markets higher or lower.
Monday:
11:00 NY Fed 3 year inflation expectations. Prior to August the reading was 3.2% and on Monday it was released as 2.8%. That helped the markets rally on Monday.
Tuesday:
8:30 Consumer Price Index
8:30 Core CPI is expected to come in at 0.3%
8:30 CPI Year-On-Year is estimated to be no higher than 8%. For July it was 8.5%.
8:30 CPI Core year-on-year is estimated to be 6%, up slightly from July’s 5.9%.
Stock Market Outlook Archives
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Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
