Stock Market Outlook for Wed Nov 30 2022 – Weakness and The Fed

On Tue Nov 29 2022 stocks remained weak but losses were much smaller on both the S&P and NASDAQ. Trading volumes were also low as many investors are waiting on the Fed’s Beige Book due out on Wednesday afternoon. Many investors believe the market will react “badly” after the contents of the Beige Book are revealed.

The S&P ended the day down just 6 points at 3957 while the NASDAQ dropped 65 points, ending the day at 10,983.

With low volumes many stocks are in limbo as investors are waiting for Wednesday’s afternoon release of the next Fed minutes.

Let’s review the closing SPX technical indicators from Tuesday to see what to expect on Wednesday.

Stock Market Outlook Chart Comments At The Close on Tue Nov 29 2022 

On Tuesday the S&P closing candlestick ended the day below the 200 day moving average for a second straight day. The candlestick is bearish for Wednesday but also points to a potential bounce.

The closing candlestick is still above the 21, 50 and 100 day moving averages which is bullish.

The Upper Bollinger Band crossed above the 200 day on Wednesday November 16 which is a bullish signal. On Tuesday it was back climbing higher.

The Lower Bollinger Band is also turning higher which at present is bullish.

A new up signal was generated on Friday Nov 11 as the 21 day moving average is back above the 50 day. This is bullish. The 21 day is continuing to rise and is at the 100 day moving average. We may see a new up signal this week.

The 50, 100 and 200 day moving averages are all turning sideways which is bullish.

There are now 5 down signals in place since April 24 and one up signal.

The chart is 60% bullish for Wednesday which is unchanged from Monday’s closing technical analysis.

Stock Market Outlook review of Tue Nov 29 2022

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising slightly and turning back positive.

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

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thursday Oct 16. On Tuesday the up signal was almost gone. The histogram also lost most of its strength.

• 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 trending sideways..

• 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 a down signal in place and is still overbought.

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 negative.

• 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 but positive.

• 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

4070 is resistance

4050 is resistance

4030 is resistance

4025 is resistance

4000 is resistance

3975 is resistance

3965 is resistance

3950 is resistance

3925 is light support

3900 is light support

3875 is light support

3850 is light support

3825 is light support

3800 is good support

 Stock Market Outlook for Tomorrow – Wed Nov 30 2022 

For Wednesday the S&P is still flashing down signals and warnings of weakness, despite closing down just 6 points. The Fed’s Beige Book may keep market action moving sideways in the morning with a chance to move higher toward 2:00 PM.

The technical indicators are continuing to shift to the downside with half of them showing negative readings. The other half though are still trying to hold positive signals but all are weaker.

Trading volume on Tuesday was slanted heavily to advancers on both indexes despite the closing losses.

For Wednesday there is still a good chance the market will try to bounce after 2:00 PM, especially if the Fed’s Beige Book shows no change in language.

Potential Economic and Political Market Moving Events

On Wednesday we get a number of economic reports and the Fed’s Beige Book. On Thursday  inflation reports will impact the markets and on Friday we get the November non-farm payroll numbers.

Tuesday:

9:00 Case-Shiller home price index was -8.7% which was better than estimated.

10:00 Consumer confidence index came in at 100.2  just slightly stronger than estimates.

Wednesday:

8:15 ADP Employment report which is expected to report 190,000

8:30 Real GDP revision

9:45 Chicago PMI

10:00 Chicago PMI

10:00 Pending home sales index which is expected to come in at -5.5&

2:00 Beige Book

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