On Tuesday stocks faced another choppy session which saw the SPX test 3950 before moving back up to close at 3971, just 6 points lower.
The NASDAQ also faced a choppy day with repeated selling in a number of tech names including Microsoft as investors were busy taking profits. The index though managed to move back up in the final hour to close at 11,716, down 52 points.
It was a whipsaw day that saw many investors unloading bank shares that just a day earlier were being bought up.
Let’s review the closing technical indicators from Tue Mar 28 2023 to see what we should expect for Wed Mar 29 2023.
Stock Market Outlook Chart Comments At The Close on Tue Mar 28 2023
The index closed with a bearish candlestick for Wednesday. There are long shadows once again in Tuesday’s candlestick and often that signals another choppy day lies ahead as the index pushes basically sideways.
The Upper Bollinger Band is moving sideways which is a bearish signal. The Lower Bollinger Band is also turning sideways which is bearish There is no signal up or down as of Tuesday’s close in the latest Bollinger Bands Squeeze.
The 200 day moving average is falling which is bearish. The 21 day is continuing to descend after generating a down signal on Friday Mar 17. It is below all major moving averages.
Meanwhile the 50 day has turned sideways but is holding above the 200 day. This is still bullish. The 100 day is moving sideways above the 21 day. This is bearish.
At present there are 4 down signals in place since April 24 and 3 up signals since Jan 13.
The chart is once again more bearish than bullish for Wednesday.
Stock Market Outlook review of Tue Mar 28 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) up signal from Mar 21 gained more strength. The histogram is also 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 falling and negative.
- 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.
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 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 falling and slightly negative.
- 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 29 2023
For Wednesday the technical indicators are slipping into a more neutral stance with a slight bearishness. There are no signals to suggest a major drop is coming, just more choppy trading with dips and spikes. Wednesday will see the same type of action as investors try to position themselves to profit from any bounce, while also trying to protect from any drop. The day will end bearish.
Potential Economic and Political Market Moving Events
Wednesday:
10:00 Pending home sales are expected to have slowed to -3.0%
10:00 Fed Governor Barr who is more hawkish testifies to the House of banks.
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