Day’s Summary
On Tuesday investors tried to bounce stocks once again to continue Monday’s rally. However with rising treasury yields, plunging retail stocks and declining bank stocks, investors gave up and stocks ended lower on the S&P while the NASDAQ managed a positive close.
Losses on the S&P were small at just 12 points while the NASDAQ added only 8 points.
Trading volumes slipped on Tuesday as many investors are in a hole pattern ahead of the Jackson Hole speech by Fed Chair Powell on Thursday.
Let’s review the SPX index from Tuesday to see what to expect for Wed Aug 23 2023.
Stock Market Outlook: SPX Closing Chart For Tue Aug 22 2023
The index stayed above the 100 day moving average on Tuesday but the i index is still deeply oversold.
The closing candlestick on Tuesday is still bearish indicating that Tuesday was just a bearish bounce.
The 21 day moving average continued falling sharply. It may cross below the 50 day shortly which would be a strong down signal.
The 50, 100 and 200 day moving averages are continuing to climb which is bullish but the 50 day will start to turn lower this week unless the market can bounce.
The Lower Bollinger Band is still falling which is bearish. The Upper Bollinger Band is turning lower which advises that more downside lies ahead.
Stock Market Outlook review of Tue Aug 22 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and negative. It is signaling extremely oversold.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thursday Jul 27. On Wed Aug 23 2023 the down signal was stronger. It is at a level where often we will see a strong bounce.
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Ultimate Oscillator: The Ultimate Oscillator is unchanged, negative and oversold.
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Slow Stochastic: The Slow Stochastic has an up signal in place. It is extremely oversold and signaling a bounce is coming.
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Relative Strength Index: The RSI signal is falling back and oversold.
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Rate of Change: The rate of change signal is falling and signaling oversold.
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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 resistance |
| 4435 is resistance |
| 4420 is resistance |
| 4400 is support |
| 4390 is support |
| 4370 is support |
| 4350 is support |
| 4340 is support |
| 4325 is support |
| 4310 is support |
| 4300 is support |
| 4290 is support |
| 4275 is support |
| 4250 is support |
| 4240 is support |
| 4225 is support |
| 4210 is support |
| 4200 is good support |
Stock Market Outlook for Wed Aug 23 2023
On Tuesday the technical indicators returned to their bearish stance. None are signaling the next move will be higher for the index. That said, they are still deeply oversold and are signaling that a bounce is likely on Wednesday but it won’t hold.
On Wednesday watch Treasury yields again. If they rise further, stocks will move lower. But, if yields dip, even slightly, stocks will rally.
Meanwhile the outlook is for stocks to attempt another rally but fail and end lower or flat ahead of tomorrow’s speech by Fed Chair Powell at Jackson Hole.
Potential Economic and Political Market Moving Events
The big event this week is the Jackson Hole summit
Wednesday:
9:45 S&P Flash services PMI is expected at 53.5%
9:45 S&P Flash manufacturing PMI is expected at 48.9%
10:00 New home sales for July are expected to climb to 703,000 from 697,000