Stock Market Outlook for Wed Sep 13 2023

Sep 13, 2023 | Stock Market Outlook

Prior Trading Day Summary

On Tuesday stocks gave back the bounce on Monday. It was a nice bounce, but investors are focusing on the upcoming CPI and PPI reports which is causing the bounce to be given back.

On Wednesday if the CPI report shows inflation weakening or certainly not increasing, then bulls have a chance to revive Monday’s bounce.

The SPX lost 25 points after gaining 29 points on Monday. The NASDAQ lost 144 points after gaining 1156 points on Monday.

Let’s review the SPX from Tue Sep 12 2023 to see what to expect for Wed Sep 13 2023.

Stock Market Outlook: SPX Closing Chart For Tue Sep 12 2023

The index closed back below the 50 day which is bearish but above the 21 day moving average. which is bullish.

The closing candlestick on Tuesday is bearish but with two shadows, head and tail, the candlestick advises investors could see a bounce or a move lower on Wednesday.

The 50, 100 and 200 day moving averages are continuing to climb which is bullish.

The Lower Bollinger Band is moving below the 100 day which is bullish. The Upper Bollinger Band is moving sideways. The Bollinger Bands Squeeze is not indicating which way stocks will turn.

Stock Market Outlook review of Tue Sep 12 2023

Stock Market Outlook: Technical Indicators Review

Momentum: Momentum is falling and slightly 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 Tue Aug 29 2023. On Tue Sep 12 2023 the up signal was almost gone.

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 slightly positive.

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 weak up signal.

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 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.

Stock Market Outlook: Support and Resistance Levels

4600 is resistance

4575 is resistance

4550 is resistance

4525 is resistance

4500 is resistance

4485 is resistance

4470 is resistance

4450 is support

4435 is support

4420 is support

4400 is support

4390 is support

4370 is support

4350 is support

For Wednesday the technical indicators are split with most indicators showing weakness ahead of the CPI report on Wednesday and the PPI report on Thursday.

These reports will hold sway over which direction stocks will take. The technical indicators being split, also indicates the index could move either way today.

The most important thing about Tuesday is the SPX closed above the important 4450 support level. That’s the best thing the bulls could ask for from Tuesday’s trading.

On Wednesday everything will hinge on the CPI reports. Any hint that inflation is rekindling will send stocks lower. Any sign of inflation easing will restart Monday’s rally.

Potential Economic and Political Market Moving Events

This week the core CPI numbers on Wednesday and PPI numbers on Thursday will impact stocks.

Tuesday:

8:30 Consumer price index is expected to rise to 0.6%

8:30 Core CPI is expected to remain unchanged at 0.2%

8:30 CPI year-over-year is expect to rise to 3.6%

9:30 Core CPI year-over-year is expected to fall to 4.3%

2:00 Federal budget is expected to be -$245 billion.