Stock Market Outlook for Thu Mar 30 2023 – Higher Still

On Wednesday stocks opened higher and built on the morning buying pressure. By the close the S&P was up 56 points for a 1.4% gain to close at 4027. The NASDAQ rose 210 points for a 1.8% gain to close at 11,926.

It was a much stronger day than expected with solid gains in the indexes as investors focus shifted away from the banking “crisis”.

Let’s review the closing technical indicators from Wed Mar 29 2023 to see what we should expect for Thu Mar 30 2023.

Stock Market Outlook Chart Comments At The Close on Wed Mar 29 2023 

The index closed with a bullish candlestick for Thursday and back above all major moving averages.

The Upper Bollinger Band is starting to turn up and the Lower Bollinger Band is turning down. Both are bullish signals as the Bollinger Bands Squeeze looks set to send indexes higher.

The 200 day moving average is falling which is bearish. The 21 day is turning back up and may cross above the 100 day moving average shortly. That will be a new bullish signal.

The 50 day continues above the 200 day which is 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 more bullish than bearish for Thursday. A higher day is expected.

Stock Market Outlook review of Wed Mar 29 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) 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 rising and 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 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 rising 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 rising and back 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

4075 is resistance

4050 is resistance

4030 is resistance

4025 is resistance

4000 is support

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 Thu Mar 30 2023 

The technical indicators have swung back to positive and bullish. In the Support and Resistance section, the 4000 valuation turned to support from resistance.

All the technical indicators gains strength and are positioned to move higher on Thursday. Dips are once again opportunities to setup trades.

I will be buying SPY call options in the Market Direction Portfolio on Thursday.

Potential Economic and Political Market Moving Events

Thursday:

8:30 GDP is expected to come in at 2.7%

8:30 Weekly Initial Unemployment Insurance Claims is expected to come in at 195,000

4:15 Fed H 4.1 report on bank lending is released

Three Fed officials speak on Thursday afternoon. None are expected to swing markets lower.

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