Stock Market Outlook for Fri Dec 9 2022 – Second Bounce Attempt Likely

On Thursday the S&P spent the day in a fairly tight trading range and closed up 29 points. The NASDAQ rose 123 points. Volumes on both indexes were again lower as many investors continue to wait for next week’s inflation report and the Fed’s decision on interest rates. Many analysts and investors continue to expect markets to move lower while there are still some analysts expecting the index to hold, climb and then rally at month end providing the market with another Santa Claus Rally.

Let’s review the technical indicators at the close on Thu Dec 8 2022 to see what to expect for Fri Dec 9 2022.

Stock Market Outlook Chart Comments At The Close on Thu Dec 8 2022 

On Thursday the S&P closed below the 200 day, 21 day but above the 100 day moving average. This is bearish. The closing candlestick is bearish but also signaling a potential for the market to continue to bounce on Friday.

The Upper Bollinger Band crossed above the 200 day on Wednesday November 16 which is a bullish signal. On Thursday the Upper Bollinger Band continued moving lower and the Lower Bollinger Band is still rising and is above the 50 day moving average. This is presently bearish as the index enters a Bollinger Bands Squeeze.

A second up signal was generated on Wednesday Nov 30, with the 21 day moving above the 100 day.

The first up signal was Friday Nov 11 when the 21 day moving average moved above the 50 day.

The 21 day, 50 day and 100 day moving averages are turning higher which is bullish. The 200 day is trending sideways which is neutral.

There are now 4 down signals in place since April 24 and two up signals.

The chart though is 80% bearish for Friday.

Stock Market Outlook review of Thu Dec 8 2022

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is unchanged 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 Thursday the down signal gained some strength. The histogram is negative.

• 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 and negative.

• 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.

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.

• 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 unchanged.

• 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:

4150 is resistance

4120 is resistance

4100 is resistance

4090 is resistance

4070 is resistance

4050 is resistance

4030 is resistance

4025 is light support

4000 is light support

3975 is light support

3965 is light support

3950 is good support

3925 is light support

3900 is good support

3875 is light support

3850 is light support

3830 is light support

3810 is light support

3800 is good support

 Stock Market Outlook for Tomorrow – Fri Dec 9 2022 

For Friday the technical indicators are still bearish but they are becoming more mixed after Thursday positive close. The i index is back above 3950 which is an important support level for the SPX.

The indicators that are bearish are gaining more strength to the downside despite Thursday higher close. The closing candlestick is advising that Friday could still see the bounce continue despite the strong bearish bias.

Potential Economic and Political Market Moving Events

Today’s is this week’s biggest events. The PPI, consumer sentiment and 5 year inflation expectations could move the markets.

Friday:

8:30 Producer price index is expected to be 0.2%

10:00 University of Michigan consumer sentiment index is expected to be 56.5

10:00 University of Michigan 5 year inflation expectations

10:00 Wholesale inventories revision is expected to come in at 0.8%

Stock Market Outlook Archives

Stock Market Outlook for Fri Apr 19 2024 – Deeply Oversold – Bounce Likely – Higher Close

Prior Trading Day Summary: Thursday saw another morning bounce attempt but no follow through. However the SPX did not break below 5000 and managed to close at 5011 although minutes ....... Read More

Morning Investing Strategy Notes for Thu Apr 18 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu Apr 18 2024 discuss the outlook for Thursday and a possible bounce or a move lower. There are trade ideas ....... Read More

Stock Market Outlook for Thu Apr 18 2024 – Deeply Oversold – Bounce Attempt Expected

Prior Trading Day Summary: Wednesday saw a bounce attempt at the open which managed to reach 5078 before selling once again pushed stocks lower. By 12:45 stocks looks almost ready ....... Read More

Morning Investing Strategy Notes for Wed Apr 17 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed Apr 17 2024 discuss the outlook for a potential bounce on Wednesday. There are trade ideas outlined in Las Vegas ....... Read More

Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt

Prior Trading Day Summary: Tuesday found stocks stuck in a fairly tight trading range as investors remain worried about a potential Israeli retaliatory strike against Iran and what might be ....... Read More

Morning Investing Strategy Notes for Tue Apr 16 2024

For FullyInformed Members the morning Investing Strategy Notes for Tue Apr 16 2024 discuss the outlook for stocks for Tuesday and the chance of a bounce. There are trade ideas ....... Read More

Stock Market Outlook for Tue Apr 16 2024 – Deeply Oversold

Prior Trading Day Summary: Monday started the day as expected with a massive rally at the open and a push higher especially when retail sales came in stronger than expected. ....... Read More

Morning Investing Strategy Notes for Mon Apr 15 2024

For FullyInformed Members the morning Investing Strategy Notes for Mon Apr 15 2024 discuss the outlook for stocks for Monday as well as the third week as a whole. There ....... Read More

Stock Market Outlook for Mon Apr 15 2024 – Expect A Bounce

Prior Trading Day Summary: On Friday investors got better than expected bank earnings but sold bank stocks lower. The selling extended into other sectors until by the close the indexes ....... Read More

Morning Investing Strategy Notes for Fri Apr 12 2024

For FullyInformed Members the morning Investing Strategy Notes for Fri Apr 12 2024 discuss the CPI numbers released on Thursday and the outlook for stocks for the remainder of the ....... Read More

Stock Market Outlook for Fri Apr 12 2024 – All About Bank Earnings

Prior Trading Day Summary: On Thursday investors got a bit of good news. First the Weekly Initial Unemployment Insurance Claims came in lower than expected at 211,000. If the weekly ....... Read More

Morning Investing Strategy Notes for Thu Apr 11 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu Apr 11 2024 discuss the PPI numbers due out today before markets open. There are trade ideas outlined in Wells ....... Read More

Stock Market Outlook for Thu Apr 11 2024 – Weakness and Lower

Prior Trading Day Summary: On Wednesday the CPI number was higher than estimates. For many analysts it meant that the Fed would probably delay any rate cut longer than expected. ....... Read More

Morning Investing Strategy Notes for Wed Apr 10 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed Apr 10 2024 discuss the CPI numbers due out today at 8:30 and the 2:00 PM FOMC minutes.. There are ....... Read More

Stock Market Outlook for Wed Apr 10 2024 – All About The CPI Numbers

Prior Trading Day Summary: On Tuesday the morning saw stocks plunge but not as deep as on Thursday. That brought in the dip buyers who picked through the stocks and ....... Read More