Tuesday saw stocks rebound from being very oversold. The technical indicators at the close of the day showed the oversold readings were gone thanks to the strong rally. However another down signal was generated at the close of the day when the 21 day moving average reached the 200 day moving average.
The S&P rose 63 points to close at 3919 while the NASDAQ rose 239 points to end the day at 11,428.
Let’s review the closing technical indicators from Tue Mar 14 to see what we should expect for Wed Mar 15.
Stock Market Outlook Chart Comments At The Close on Tue Mar 14 2023
On Tuesday the S&P closed above the Lower Bollinger Band but below all moving averages. This is bearish.
The index closed with a bearish outlook forWednesday with a candlestick pointing to Tuesday’s rally as more of a bounce than a change in trend.
The Upper Bollinger Band is turning down while the Lower Bollinger Band is sideways. Both are relatively neutral signals.
The 200 day moving average is falling back which is bearish. The 21 day is fell to the 200 day on Tuesday and will be below it and the 50 day on Wednesday. This is a new down signal and wipes out the up signal from Feb 3 when the 21 day moved above the 200 day.
The 50 day moving average is also turning lower with the 100 day also dropping.
At present there are two down signals in place since April 24 and 4 up signals since Jan 13.
The chart is bearish for Wednesday.
Stock Market Outlook review of Tue Mar 14 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) down signal lost some strength on Tuesday. The histogram also showed some weakness to the down signal.
- 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 negative. It is not 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 an up signal in place and is showing 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, negative and not 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 rising, negative and not oversold.
- 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:
4100 is resistance
4090 is resistance
4075 is resistance
4050 is resistance
4030 is resistance
4025 is resistance
4000 is resistance
3975 is light support
3965 is light support
3950 is good support
3930 is light support
3900 is good support
3870 is light support
3850 is good support
3825 is light support
3810 is light support
3800 is good support
3775 is good support
Stock Market Outlook for Wed Mar 15 2023
For Wednesday the technical indicators are no longer oversold and all are trying to rise. The closing candlestick however is not trusting the rally on Tuesday. With another down signal on Tuesday at the close we should expect to see a further rally attempt in the morning which may run into more selling. The afternoon could be choppy with either a slightly positive or negative close.
It won’t take much to get investors selling Tuesday’s rally on any whiff of bad news. Wednesday should be a choppy day.
Potential Economic and Political Market Moving Events
Today we get a large number of reports which could swing the markets. Dips could be deeper than expected if some of the numbers are stronger than expected.
Wednesday:
8:30 Retails sales with and without autos
8:30 Producer price index (PPI)
8:30 Core PPI
8:30 PPI year-over-year
8:30 Core PPI year-over-year
8:30 Empire State Manufacturing
10:00 Business Inventories
10:00 Home-builders survey
Stock Market Outlook Archives
Morning Investing Strategy Notes for Wed Jun 11 2025
Stock Market Outlook For Wed Jun 11 2025 – A Little Weakness But Still Higher
Morning Investing Strategy Notes for Tue Jun 10 2025
Stock Market Outlook For Tue Jun 10 2025 – Choppy – Dips Likely But Higher
Morning Investing Strategy Notes for Mon Jun 9 2025
Stock Market Outlook For Mon Jun 9 2025 – Choppy With Bias Higher
Morning Investing Strategy Notes for Fri Jun 6 2025
Stock Market Outlook For Fri Jun 6 2025 – All About May Jobs Numbers
Morning Investing Strategy Notes for Thu Jun 5 2025
Stock Market Outlook For Thu Jun 5 2025 – Weakness – Dips Likely – Still Bullish
Morning Investing Strategy Notes for Wed Jun 4 2025
Stock Market Outlook For Wed Jun 4 2025 – Mixed Outlook But Still Bullish
