Stock Market Outlook for Wed Mar 22 2023 – Unconfirmed Up Signal

With the government basically placing a guarantee on every person’s bank account, investors jumped back into stocks and pushed the index back to the 4000 level, one day ahead of the Fed’s next interest rate decision.

By the close the S&P was up 51 points to end the day at 4002. The NASDAQ was up 184 points to end the day at 11,860.

The close saw a new unconfirmed up signal generated from the MACD technical tool.

Let’s review the closing technical indicators from Tue Mar 21 2023 to see what we should expect for Wed Mar 22 2023.

Stock Market Outlook Chart Comments At The Close on Tue Mar 21 2023 

The index closed with a bullish candlestick for Wednesday.

The Upper Bollinger Band is turning down which is a bearish signal. The Lower Bollinger Band is turning higher which is a bullish signal and is entering into a Bollinger Bands Squeeze for Wednesday. At present the signals look positive for a bounce higher.

The 200 day moving average is falling back which is bearish. The 21 day is continuing to descend after generating a down signal on Friday. It is below all major moving averages again.

Meanwhile the 50 day is moving further above the 200 day moving average which is bullish.

At present there are 4 down signals in place since April 24 and 3 up signals since Jan 13.

The chart is is more bullish for Wednesday ahead of the Fed’s interest rate decision.

Stock Market Outlook review of Tue Mar 21 2023

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising and positive.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a new unconfirmed up signal at the close today. The histogram turned positive..

• 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 near overbought.

• 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 still climbing indicating Wednesday should be higher.

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 sharply and near overbought.

• 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 and nearing positive readings.

• 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 22 2023 

For Wednesday the technical indicators are more bullish heading into the Fed’s decision on interest rates. With investors convinced the Fed will either pause or place just a quarter point rise and then signal a pause, Wednesday should see the markets climb higher leading toward the 2:00 PM announcement.

A higher day on Wednesday will generate a confirmed up signal from the MACD technical indicator. All the indicators have gained strength.

Potential Economic and Political Market Moving Events

The big event for the week is today when the Fed releases what is expected to be a quarter point rate increase. If there is no rate increase expect a large rally to the upside to start this afternoon.

Wednesday:

2:00 Fed decision on interest rates

2:30 Fed Chair Powell’s news conference

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