Thursday saw stocks open higher but by 10:00 they commenced to fall. By the start of the lunch hour the S&P was down to 3970, marking another new sell-off low. This brought out negative comments from a string of bear analysts, but instead of falling further, stocks found buyers and a rally ensued. By the end of the day the S&P had risen 21 points and retaken 4000 to close at 4012.
The NASDAQ rose 83 points to close at 11,590.
While many analysts felt the FOMC minutes from Wednesday gave no clarity to investors and therefore no chance for a rebound to the selling, the minutes did seem to suggest that the large run-up in interest rates was largely done in 2022 and forward-looking comments pointed to the likelihood of quarter point interest rate hikes as being used in 2023 as needed. In other words, the market has a good chance to not retest the low of October in the short-term which could move the market back to a bullish stance.
Let’s review the closing technical indicators from Thu Feb 23 2023 to see what they advise we should be watching for Fri Feb 24 2023.
Stock Market Outlook Chart Comments At The Close on Thu Feb 23 2023
On Thursday the index closed just above support at 4000 and at the 200 day moving average. The closing candlestick ended the day above the Lower Bollinger Band. The candlestick is bearish but also signaling there is a chance of another bounce attempt on Friday.
If you look closely you can also see that the closing candlestick on Thursday continued placing pressure on the Lower Bollinger Band to turn lower. That also helped to turn the Upper Bollinger Band higher. A Bollinger Bands Squeeze is not inevitable which at present is a plus for stocks.
The 200 day moving average is rising which is bullish. The 21 day moving average is trending sideways while the 50 and 100 day moving averages are still rising. The 21 day is not falling as of yet, which is also a positive for stocks.
At present there are 2 down signals in place since April 24 and 4 up signals since Jan 13. We need to see the 50 and 100 day moving averages climb above the 200 day to prove the rally still has some staying power and to wipe out the two remaining down signals from back in April.
The chart is still almost 65% bearish for Friday but, as we saw on Wednesday’s closing chart, there is still strength in the chart as the index holds the 200 day and 4000.
Stock Market Outlook review of Thu Feb 23 2023
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) down signal gained strength on Thursday. The MACD histogram also gained negative 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 unchanged and negative. It is nearing oversold readings.
- 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 now into oversold levels. Often we can look forward to a bounce when the readings are this negative for the Slow Stochastic.
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 has bounced from oversold levels and turned sharply higher.
- 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 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:
4250 is resistance
4220 is resistance
4200 is resistance
4180 is resistance
4150 is resistance
4125 is resistance
4100 is resistance
4090 is resistance
4075 is light support
4050 is support
4030 is light support
4025 is light support
4000 is light support
3975 is light support
3965 is light support
3950 is good support
3930 is light support
3900 is good support
Stock Market Outlook for Tomorrow – Fri Feb 24 2023
The technical indicators are shifting. There are some signals from the RSI, Rate of Change and Momentum that the index will swing back to up despite the growing strength of the down signal from MACD.
This means for Friday stocks are positioned to try to move higher. Dips are still quite likely but investors are picking through stocks. A choppy day is likely on Friday but ending with a higher close to finish the week. On Friday I will be using dips below 4000 to setup trades.
Potential Economic and Political Market Moving Events
On Friday we get consumer spending, personal income and the PCE (personal consumption expenditures) index. As long as these are in-line with estimates the market will not use them as a reason to sell-off. I included below two important reading from Thursday.
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims came in at 192,000 just slightly below estimates.
8:30 GDP came in at 2.7%, below expectations for 2.9%. This caused a number of analysts to point to signs of a coming recession. This lower percent was part of the reason for the early morning sell-off.
Friday:
8:30 Consumer spending expected to be 1.4%
8:30 Personal income
8:30 PCE Index
8:30 Core PCE index
8:30 Core PCE year-over-year
10:00 New home sales
10:00 Consumer sentiment (final)
Stock Market Outlook Archives
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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
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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
