The oversold markets rallied hard on Tuesday for another day of large gains.
The S&P rose 89 points to close at 4262, back above the important 4250 valuation which supports the index moving higher shortly.
The NASDAQ rose 367 points to end the day at 12,948. This is the 4th best day of gains in 2022.
With both indexes having decent moves higher, let’s review the closing technical signals from Tue Mar 15 2022 to see what is in-store for investors on Wednesday.
Stock Market Outlook Chart Comments At The Close on Tue Mar 15 2022
There were some changes in the S&P chart following Tuesday’s close.
The Upper Bollinger Band is continuing to turn lower while the Lower Bollinger Band is also falling. As explained last week, if the Lower Bollinger Band falls the market will continue to see losses.
The closing candlestick on Monday is bullish. Often this type of candlestick will see a second day of gains.
The SPX now has 4 down signals in place.
All the major moving averages are falling lower including the 200 day.
The chart remains bearish as of Monday’s close but is pointing to the likelihood of another positive day on Wednesday.
Stock Market Outlook review of Tue Mar 15 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is risingg and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Mon Mar 7 2022 . The down signaled weakened on Tuesday and the saw the down signal cut by more than half. The MACD histogram also weakened.
- 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 turned positive.
- 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 still has a down signal in place.
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 back positive.
- 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 which indicates we will see some large moves in prices 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:
4500 is resistance
4490 is light resistance
4475 is light resistance
4450 is light resistance
4400 is resistance
4370 is light resistance
4350 is light resistance
4300 is good support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
4150 is good support
4000 is good support
Stock Market Outlook for Tomorrow – Wed Mar 16 2022
The technical indicators on Tuesday are showing more strength for another chance of a higher close.
The Fed will announce a rate increase on Wednesday of probably a quarter of a point. Often markets will rally on the news simply because another unknown event is “out-of-the-way”.
For Wednesday the market will see dips and some could be deep but in general the index will rise, leading up to the Fed’s announcement and will end the day higher, after the decision is released.
A half point increase on Wednesday by the Fed is not likely but should it happen, investors may sell stocks lower although even a half point increase would probably be met by a sideways to slightly higher close.
The bias has shifted to higher for Wednesday as the Fed begins to raise interest rates.
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