On Thu Dec 29 2022 markets bounced higher following 2 days of selling. The question now is whether we are on the verge of a bigger bounce for into next week or whether the index slips back below 3800 again.
On Thursday the S&P closed up 66 points at 3849, back to the 3850 support level which is a good sign for the bulls. This also places the S&P back positive for the week.
The NASDAQ rose 264 points to end the day at 10478. This NASDAQ is now down just 20 points on the week.
Let’s review the closing technical indicators from the SPX on Thu Dec 29 2022 to see what to expect for Fri Dec 30 2022.
Stock Market Outlook Chart Comments At The Close on Thu Dec 29 2022
On Thu Dec 29 2022 the S&P closed below all moving averages for the 7th trading day but still managed to stay above the Lower Bollinger Band. This is still bearish.
The closing candlestick is bullish for Friday but points to Thursday’s spike higher as just a bounce at present and not a change in the bearish outlook.
The Upper Bollinger Band is turning lower which is bearish. The Lower Bollinger Band is still moving lower which is bullish.
The 200, 21 and 100 day moving averages are falling. The 50 day is starting to turn sideways.
The 21 day moving average is at the 100 day moving average. A drop below it would be a major down signal.
There are now 4 down signals in place since April 24 and two up signals.
The chart is 65% bearish for Friday.
Stock Market Outlook review of Thu Dec 29 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal Tuesday Dec 6 2022. On Wednesday the down signal lost strength. The histogram also lost 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 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 a down signal in place and back into oversold.
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 sharply 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 but 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.
Support and Resistance Levels To Be Aware Of:
4050 is resistance
4030 is resistance
4025 is resistance
4000 is resistance
3975 is resistance
3965 is resistance
3950 is resistance
3925 is resistance
3900 is resistance
3875 is resistance
3850 is good support
3830 is light support
3810 is light support
3800 is good support
3775 is good support
3750 is good support
3730 is light support
3725 is light support
3715 is light support
3700 is good support
3685 is light support
Stock Market Outlook for Tomorrow – Fri Dec 30 2022
For Friday the technical support level of 3850 increases from light to good support.
On Friday investors should find out if this is the start of the highly anticipated Santa Claus rally or simply a bounce. An early morning dip down to 3825 is possible but a rally back to above 3850 is expected by the close if not earlier in the day.
Volumes are still poor but while Friday will also probably have low volume, Tuesday next week should see a return to average volume levels.
Potential Economic and Political Market Moving Events
On Thursday the Weekly Initial Unemployment Insurance Claims rose which was cheered by investors as it meant more people were being laid off which is considered a positive for lower inflation. Lower inflation is also seen as a signal the Fed won’t need to raise interest rates dramatically for the next interest rate release.
On Friday investors get the Chicago PMI which is not expected to move markets.
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims were higher than expected at 225,000. This helped the bulls push stocks higher on Thursday.
Friday:
9:45 Chicago PMI is expected to be 40.5
Stock Market Outlook Archives
Stock Market Outlook For Wed May 6 2026 – Choppy But Higher Still
Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
