On Tuesday markets spent the day in a sideways, choppy fashion as low volume dominated. Investors stood aside waiting for the the CPI due out on Wednesday along with the Minutes of the latest FOMC meeting. The index closed virtually unchanged from Monday.
The S&P closed down just 0.17 at 4108 and the NASDAQ lost 52 points, closing at 12031.
Let’s review the closing technical indicators from Tue Apr 11 2023 to see what we should expect for Wed Apr 12 2023.
Stock Market Outlook Chart Comments At The Close on Tue Apr 11 2023
The index closed with a bullish candlestick for Wednesday along with some signals advising the index is still overbought.
The Upper Bollinger Band is turning up and the Lower Bollinger Band is also turning higher. Both are bullish signals.
The 200 day moving average is at 4000 and climbing which is bullish. The 21 day is above the 100 day and moved to the 200 day on Tuesday. It should move above it on Wednesday for another up signal.
The 50 day continues above the 200 day which is bullish. The 100 day is moving sideways just below the 21 day which is the only bearish signal from the moving averages.
If you look at the list of down and up signals, there are now just 2 down signals in play with the most important being the April 24 down signal. That signal is now almost a year old and is a prime reason many analysts still believe this is a bear market. There are 4 up signal since January. The SPX chart is warning that Wednesday will see dips again as the markets remain overbought.
Stock Market Outlook review of Tue Apr 11 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is dipping and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) up signal from Mar 21 lost a bit of strength. The histogram also shows a drop in 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 and positive. It is signaling overbought.
- 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. It is also signaling 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 rising and positive. It is also 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 rising and positive. It is signaling a larger move is expected on Wednesday.
- 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:
4150 is resstance
4135 is resistance
4125 is resistance
4100 is resistance
4090 is resistance
4075 is resistance
4050 is resistance
4030 is light support
4025 is light support
4000 is support
3975 is light support
3965 is light support
3950 is good support
3930 is light support
3900 is good support
Stock Market Outlook for Wed Apr 12 2023
For Wednesday the index is still signaling as overbought and dips are once more likely. A move as low as 4070 could occur.
The indicators are still bullish in general and indicate the SPX should move higher.
Wednesday will be choppy but most of the market movement will depend on the CPI number due out before markets open.
The technical indicator though, point to a higher day on Wednesday.
Potential Economic and Political Market Moving Events
Wednesday:
8:30 Consumer Price Index and Core CPI
8:30 CPI and Core CPI year over year
2:00 Minutes of FOMC meeting