The first day of March saw stocks move lower from the morning open. Selling was as heavy as was seen on Monday, the final trading day of February.
Intraday the S&P fell to 4280 but then recovered and managed to close above 4300, an important technical support level.
The S&P lost 67 points closing at 4306 while the NASDAQ lost 219 points closing at 13,532.
Let’s review the technical indicators from Tuesday’s close to see what we should expect for Wednesday, March 2.
Stock Market Outlook Chart Comments At The Close on Tue Mar 1 2022
The S&P chart moved lower but left behind a bearish candlestick. This candlestick though, often signals a bounce attempt will occur on the following day.
The Upper Bollinger Band is turning sideways while the Lower Bollinger Band is turning lower.
The 21 day moving average has stopped falling but the 50 and 100 day are back falling again.
The 200 day moving average is still holding the 4400 level which is also bullish.
There are no new up signals in the chart but you can see from the observations above that there are still a few bullish signals.
The SPX chart is though is still bearish which signals that any bounce on Wednesday should not be expected to hold. The chart points to further selling as likely.
Stock Market Outlook review of Tue Mar 1 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and back falling.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a confirmed down signal on Thursday Feb 17 2022 last week. On Tue Mar 1 2022 the down signal was still active but the signal continued to lose strength. The MACD histogram is showing strength to the upside is continuing to build.
- 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 positive and dipping.
- 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 but may turn lower if the index cannot climb higher on Wednesday.
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 back.
- 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 also 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:
4500 is resistance
4490 is light resistance
4475 is light resistance
4450 is light support
4400 is good support and the 200 day moving average
4370 is light support
4350 is light support
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 2 2022
For Wednesday the index is weak again with the index technical indicators pointing lower. The candlestick from Tuesday’s close often signals a bounce, but it also advises that any bounce won’t hold at the present time.
The markets need a cease-fire or a resolution to the war. Once that happens, the index will rally strongly.
For Tuesday expect a bounce but use it to take profits as the signals are pointing to more selling before the week is out.
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