Mon Apr 4 2022 started with just a small dip on the S&P and then a climb higher commenced. Trading was choppy at times but dips were shallow as the advance continued. By the end of the day the S&P was up 36 points for a 0.81% gain to end the day at 4582. To areas held the advance back. These were 4570 and 4580. Sellers took advantage of the push higher to unload more shares but sellers finally moved aside as buyers continued the advance.
The NASDAQ rose 1.9% in an impressive advance of 271 points to end the day at 14,532.
Let’s review the technical indicators from Monday’s close on the S&P to see what they can tell us about Tuesday.
Stock Market Outlook Chart Comments At The Close on Mon Apr 4 2022
The most important event in the chart by the close of the day was a new up signal from the 21 day which moved above the 200 day and 50 day moving averages.
The closing candlestick is bullish for Tuesday but is signaling investors should not expect a move as large as we saw on Monday by the end of the day.
The Upper Bollinger Band is still climbing and the Lower Bollinger Band is still trending sideways. The bands are still bullish.
The 200 day moving average is back at the 4400 level which is bullish. The 50 day has continued to stay above the 200 day which is bullish. The 100 day moving average is trending sideways. These are all bullish signs.
The SPX still has 4 down signals in place and 1 up signal.
The chart is still more bearish than bullish for Tuesday but the bullishness is continuing to make gains.
Stock Market Outlook review of Mon Apr 4 2022
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) issued an up signal Wed Mar 16 2022. On Monday both the MACD up signal and the histogram have lower readings than we saw on prior days. The signal is still positive but weakening each day now.
- 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 unchanged for a second day. This is not bullish.
- 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 signaling 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 rising and no longer overbought.
- 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 advises investors that we should see price swings on Tuesday that can be both up and down.
- 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:
4650 is resistance
4640 is resistance
4625 is resistance
4600 is strong resistance
4590 is resistance
4575 is light support
4560 is support
4550 is light support
4525 is light support
4500 is support
4490 is light support
4475 is light support
4450 is light support
4400 is support
4370 is light support
4350 is light support.
4300 is good support
Stock Market Outlook for Tomorrow – Tue Apr 5 2022
For Tuesday the S&P now has a new up signal in place. Unfortunately many of the technical indicators are weaker. MACD continues to lose strength to the up signal which is a bit disappointing but considering how strong it was last week in the rally, it is somewhat expected.
The Rate Of Change and the Relative Strength Index (RSI) are both continuing to rise which is bullish for Tuesday.
It will be a choppier day on Tuesday but the end of the day will be higher. The closing candlestick on Monday is advising that the move up on Tuesday will not be as big as was seen on Monday. For now, just being higher is all investors are looking for, as the rally continues.
Potential Market Moving Events
These are the events this week that could move markets.
Monday
On Monday February factory orders fell deeper than expected and estimated with a drop of half a percent. This is the first negative month in 9 months. However new orders for manufactured non-durable goods rose 1.2% which shows consumers are buying.
Tuesday
8:30 Foreign Trade Deficit which is expected to be negative 88.2 billion. Normally this is not a market moving number.
11:00 to 2PM – 1 Fed Governor and 2 Fed Presidents are speaking but none are expected to make market moving comments.
Wednesday
2:00 FOMC minutes which could move the market
8:30 Initial Jobless Claims and continuing jobless claims are reported.
9:00 Fed President Bullard speaks on the economy – could see some market movement before the open depending on how hawkish or dovish his speech is.
2:00 Fed Bank presidents Evan and Bostic speak. No market movement is expected.
Friday
10:00 Whole inventories which are expected to come in a 2.1% which is unchanged.
Stock Market Outlook Archives
Stock Market Outlook for Fri Nov 15 2024 – Choppy With Bias Lower
Stock Market Outlook for Thu Nov 14 2024 – Choppy – Dips Possible But Higher Close
Morning Investing Strategy Notes for Thu Nov 14 2024
Morning Investing Strategy Notes for Wed Nov 13 2024
Stock Market Outlook for Wed Nov 13 2024 – Choppy Trading Bias Lower
Morning Investing Strategy Notes for Tue Nov 12 2024
Stock Market Outlook for Tue Nov 12 2024 – Overbought – Dips Likely But Bullish
Morning Investing Strategy Notes for Mon Nov 11 2024
Stock Market Outlook for Mon Nov 11 2024 – Overbought – Higher Still
Morning Investing Strategy Notes for Fri Nov 8 2024
Stock Market Outlook for Fri Nov 8 2024 – Overbought – Dips Likely But Higher Close
Morning Investing Strategy Notes for Thu Nov 7 2024
Stock Market Outlook for Thu Nov 7 2024 – All About The Fed – Higher
Morning Investing Strategy Notes for Wed Nov 6 2024
Stock Market Outlook for Wed Nov 6 2024 – Election Rally Continues
