Market Outlook of S&P500 - 08Apr24
Technical observations of the S&P500 1D chart:
The MACD indicator is showing a downtrend from the past week and this should continue into the coming week.
Chaikin Money Flow (CMF) has hit below the zero line. This can be seen as a bearish signal with more selling volume.
Interpretation of CMF from the CFI website:
When there is a continuous buying period (when the CMF value is sustained above zero), the trend is considered bullish and indicates that price will continue to rise with the trend. When there is continuous selling pressure (CMF value below zero), this points to a bearish trend, indicating price will continue downward.Higher readings, either positive or negative, indicate a stronger trend. Increasing readings indicate gaining momentum.Crosses may be bullish or bearish. Bullish crosses occur when the CMF crosses the zero line from below, and stock prices continue on an upward trend. Bearish crosses occur when the CMF crosses the zero line from above, and prices continue to fall.
Moving Averages (MA). Both the MA50 line and the MA200 line are on an uptrend. The last candle is above both the MA 50 line and the MA 200 line. Thus, it could be read as bullish for the long-term and mid-term.
Exponential Moving Averages (EMA). The 3 EMA lines are starting to converge. This implies a coming reversal of the current uptrend. However, this is yet to be completed until all 3 EMA lines have crossed and commence a downward pattern.
I have replaced Stochastic with CMF to incorporate consideration of volume. Stochastic and MACD are similar with Stochastic being “more active” and more capable for “false” signals.
From the technical indicators, 4 indicate a buy rating, 4 indicate a neutral rating and 3 indicate a sell rating.
For the moving averages, 11 points to a buy rating and one point to a sell rating.
In total, 11 indicators recommend a buy rating, four are neutral and four recommend a sell rating. The overall rating for the S&P 500 from Investing points to a strong buy rating.
In conclusion, the S&P 500 should be trending down in the coming week. There are important macro and economic news that will be released in the coming week. There are some concerns about the Fed pivot with the strong jobs data and the risk of further escalation in the Middle East.
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