On Tuesday the expected bounce was anemic and the S&P continued to slide as it made another new correction low reaching 3705 intraday before closing at 3735.
The NASDAQ managed to close up 19 points to end the day at 10,828.
Markets needed to bounce on Tuesday which would have been normal following the huge down day on Monday. The majority of the time if the markets don’t bounce after a day like Monday, the index will continue to move lower.
The main focus on Wednesday will be the Fed’s interest rate decision and whether it will be half a percent, which I think it will be, or three-quarters of a percent.
Let’s review Tuesday’s closing technical indicators to see what we should expect for Wednesday.
Stock Market Outlook Chart Comments At The Close on Tue Jun 14 2022
On Tuesday the closing candlestick is again bearish and once again points to a probable bounce. The close is also below the 21 day moving average for the fourth day.
The Upper Bollinger Band is climbing higher and the Lower Bollinger Band is falling. Usually this indicates a bounce should be expected.
Any bounce though has to recover above 4100 if it is to turn into a rally and not just a bounce. That is unlikely which is why the outlook remains lower after the bounce ends.
The 200, 100 and 50 day moving averages are all falling lower and the 200 day is leading the market lower. This is bearish.
There are 4 down signals still in place and there have been no up signals since the start of April. The markets need a catalyst to move higher. At present all the catalysts are continuing to pressure stock valuations lower. The last rally is over as is obvious from the chart and the index made a new correction low of 3705 on Tuesday. Many analysts are now calling for the S&P to eventually fall to 3500 before reaching a bottom to the correction.
The chart is 90% bearish for Wednesday but there should be a bounce attempt as you can see from the technical indicators reviews below.
Stock Market Outlook review of Tue Jun 14 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and back negative. It is oversold.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Wed May 25 2022. On Tuesday MACD confirmed the down signal. The MACD histogram is very negative.
- 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 negative. It is oversold.
- 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 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 falling and oversold.
- 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.
- 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:
4200 is light resistance
4150 is light resistance
4100 is light resistance
4050 is light resistance
4025 is light resistance
4000 is strong resistance
3975 is light support and is a decline of 17.5%
3900 is good support and is a decline of 19%
3850 is good support and is a decline of 20%
3825 is light support
3800 is good support.
3775 is light support
3750 is light support
3730 is light support
3700 is good support
3675 is light support
3650 is light support
3625 is light support
3600 is good support and is a decline of 25%
Stock Market Outlook for Tomorrow – Wed Jun 15 2022
For Wednesday the Fed is expected to announce at least a half point rate increase at 2:00 PM. Many analysts believe a three quarter point rate increase will be announced which could send the market lower.
The technical indicators are pointing to the market bouncing probably around 30% or slightly more but perhaps not until Thursday. This is not a rally but a bounce. A new down signal was confirmed by MACD. I will be using any bounce if it occurs on Wednesday to close positions and lock in profits, even small ones. I will be buying SPY ETF put options in any rally using July 15 at the $370 put strike.
We could see an initial bounce after the Fed’s interest rate hike is announced but I don’t think it will last long. The index will sell lower after any initial bounce (if there is one).
The technical indicators are all losing strength and the outlook is cautious and lower even if there is a bounce on Wednesday afternoon.
Potential Market Moving Events
This week the primary events that could see markets shift are Fed related on Wednesday.
Tuesday:
9:30 Producer price index final demand came in at 0.8% as expected. This is double the last reading which was 0.4%.
Wednesday:
8:30 Retail sales
8:30 Empire State manufacturing index
10:00 NAHB home builder index
10:00 Business Inventories
2:00 FOMC statement – half point rate hike is expected
2:00 Fed Chair Powell news conference
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims
8:30 Housing Starts
8:30 Philadelphia Fed manufacturing index
Friday:
10:00 Leading economic indicators
Stock Market Outlook Archives
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Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
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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
