Prior Trading Day Summary:
On Tuesday investors learned nothing new from the FOMC report. It was simply a rehashing of what the Fed had already outlined in speeches and conferences in October. That left investors hanging a bit and resulted in the index closing down just 9 points at 4538.
The NASDAQ lost 84 points to close at 14,199.
Considering a bit higher volatility on Tuesday, volume was low. The S&P saw 3.5 billion shares traded and the NASDAQ had 4.2 billion shares change hands. It was the slowest day for the NASDAQ since October 30. For the SPX it was the slowest day since Oct 16.
Investors were hoping for a bit more direction from the FOMC minutes. There were though signals from the technical indicators that were worth noting
Let’s review the closing technical indicators from Tue Nov 21 2023 to see what to expect for Wed Nov 22 2023.
Stock Market Outlook: SPX Closing Chart For Tue Nov 21 2023
The index closed above all major moving averages and continued to move away from the Upper Bollinger Band and sideways. The outlook is still bullish.
The closing candlestick ended the day just at 4538 which is bullish and continues to signal an overbought market. The long shadow left at the close indicates some selling pressure should be expected on Wednesday and dips are likely for the final trading day before the Thanksgiving holiday.
The 21 day moving average moved above the 100 day and reached the 50 day on Tuesday. This wiped out the second down signal from early October leaving only the late August down signal.
The 50 day moving average is continuing to climb above the 100 day.
The 200 day moving average is climbing which is bullish.
The Lower Bollinger Band is is turning up which could be bearish. The Upper Bollinger Band is continuing higher which is bullish.
The S&P chart is bullish but signals overbought heading into Wednesday.
Stock Market Outlook review of Tue Nov 21 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thu Nov 2. On Tue Nov 21 2023 the close saw some weakness in the up signal.
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Ultimate Oscillator: The Ultimate Oscillator is falling and positive. It is leaving overbought.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is very overbought.
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Relative Strength Index: The RSI signal is falling and positive. It is signaling very overbought.
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Rate of Change: The rate of change signal is falling and positive. It is signaling Wednesday may end lower.
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Stock Market Outlook: Support and Resistance Levels |
| 4600 is resistance |
| 4590 is resistance |
| 4575 is resistance |
| 4565 is resistance |
| 4550 is resistance |
| 4535 is resistance |
| 4520 is resistance |
| 4500 is resistance |
| 4490 is resistance |
| 4475 is support |
| 4450 is support |
| 4440 is support |
| 4425 is support |
| 4400 is support |
| 4375 is support |
| 4350 is support |
| 4325 is support |
| 4300 is support |
| 4275 is light support |
| 4250 is light support |
| 4235 is light support |
| 4225 is support |
| 4200 is good support |
| 4185 is support |
| 4175 is support |
| 4150 is good support |
Stock Market Outlook for Wed Nov 22 2023
The technical indicators are very bullish but there are a few warning signs of potential problems for early next week. The Lower Bollinger Band is rising which could end the bullish signal from the Bollinger Bands.
With the 21 day moving average now above the 100 day and ready to move above the 50 day probably on Wednesday, there are signals of weakness starting to creep into the technical indicators, especially as the outlook remains bearish for many investors.
Volume on Wednesday will probably be lower as we head into Thanksgiving on Thursday when markets are closed. Friday is a half day.
NVIDIA Stock (NVDA) beat all estimates but the stock still sank after earnings were released. This could assist setting up further trades on Wednesday.
For Wednesday the outlook is sideways to potentially lower for stocks but the outlook overall is still bullish.
Potential Economic and Political Market Moving Events
Tuesday is the latest FOMC minutes at 2:00 PM. This should be the major economic event for the week.
Monday:
10:00 Leading economic indicators are expected to be unchanged at -0.7% but came in at -0.8% which fits the narrative of a slowing economy.
Tuesday:
10:00 Existing home sales met estimates of 3.9 million
2:00 Latest FOMC minutes released
Wednesday:
8:30 Weekly Initial Unemployment Insurance Claims are expected to be 229,000
8:30 Durable goods are expected to fall to -3.4%
10:00 Consumer sentiment is expected to be unchanged at 60.4