On Thursday The S&P slipped lower, moving below 3900 intraday. The close though saw the index off the day’s lows at 3898 basically at the 3900 level.
The NASDAQ lost 104 points to close at 10,852.
Let’s review the closing technical indicators from the SPX on Thu Jan 19 to see what to expect for Fri Jan 20.
Stock Market Outlook Chart Comments At The Close on Thu Jan 19
On Thursday Jan 19 the S&P fell back below the 50 and 100 day moving averages. It is still below the 200 day moving average. This is bearish.
The closing candlestick is bearish for Friday but also signals that a bounce could happen at any time during the day.
The Upper Bollinger Band is turning lower which is a concern and the Lower Bollinger Band is rising. The market may enter another Bollinger Bands Squeeze next week.
The 200 and 100 day moving averages are falling which is bearish but the 21 day is turning back up and the 50 day moved above the 100 day on Friday Jan 13 for a new up signal. This up signal ended the down signal from Dec 30.
At present there are are 5 down signals in place since April 24 and one up signal.
The chart is 75% bearish for Friday and shows the index is no longer overbought.
Stock Market Outlook review of Thu Jan 19 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling but still positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday Jan 9. The up signal lost much strength on Thursday. 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 falling and now 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 stronger down signal in place. It 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 falling sharply and negative.
- 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 positive which often signals bigger moves in the index are coming, whether up or down does not matter. The signal is advising the index will make larger moves. The assumption is to the downside based on Thursday’s sell-off.
- 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 light support
3900 is light support
3875 is light support
3850 is good support
3830 is good 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 Jan 20 2023
The technical signals are still advising some further downside is likely but a bounce attempt is still possible. The index may try to bounce as high as 3950 on Friday but is unlikely to hold.
New 52 week highs are still outpacing new lows which is a good sign for the bulls but for now weakness is continuing to build.
Potential Economic and Political Market Moving Events
Events on Thursday continued to show strength in the employment market. That was a primary reason for much of the selling.
Friday:
2 Fed officials speak
10:00 Existing home sales are expected to come in at 3.95 million down from the latest reading of 4.09 million.
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
