On Thursday investors spent another day worried about Friday’s inflation reports and what many analysts believe is a coming recession. As more dire reports were released on Thursday, the markets all sold lower, closing at their lows for the day.
The S&P closed down 98 points to 4017. The NASDAQ fell 332 points to end the day at 11,754.
Friday will see a number of inflation reports released at 8:30 which will be the catalyst for a move lower or higher but the technical indicators from Thursday still will have some impact on the market direction.
Let’s review Thursday’s closing technical indicators to see what they are reporting for Friday’s markets.
Stock Market Outlook Chart Comments At The Close on Thu Jun 9 2022
On Thursday the closing candlestick is bearish. As well, the closing was below the 21 day moving average. I have been writing for the past couple of weeks that a close back below the 21 day moving average would be a signal for a move back to the downside.
The Upper Bollinger Band is moving sideways and is at the 100 day moving average. This is now bearish. The Lower Bollinger Band is still trending sideways. This is still bullish but I expect the Lower Bollinger Band will move lower on Friday which will also be bearish.
I have marked the close below the 21 day moving average in the chart.
The 200, 100 and 50 day moving averages are all falling lower and the 200 day is leading the market. This is bearish.
There are 4 down signals still in place.
The chart is 90% bearish for Friday.
Stock Market Outlook review of Thu Jun 9 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and 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 Wed May 25 2022. On Thursday MACD lost a lot more strength. The MACD histogram also lost strength which you can see in the chart.
- 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.
- 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 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.
- 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 falling.
- 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:
4400 is resistance
4370 is light support
4350 is light resistance
4300 is light resistance
4290 is light resistance
4270 is light resistance
4250 is resistance
4225 is light resistance
4200 is light resistance
4150 is light support
4100 is light support
4050 is light support
4025 is light support
4000 is good support
3975 is light support and is a decline of 17.5%
3900 is good support and is a decline of 19%
3850 is good support and is a decline of 20%
3600 is good support at is a decline of 25%
Stock Market Outlook for Tomorrow – Fri Jun 10 2022
For Friday the technical indicators are all negative. There are 5 inflation reports due out on Friday starting at 8:30. (see list below). It is doubtful they will show any slowing of inflation but if they do, the market will bounce higher. But the chance of that, I think, is low at this point and I expect the reports will show either no change in inflation or a rising of inflation which will send stocks lower.
Aside from the reports though, the technical indicators are all losing strength and are pointing to more weakness no matter what the inflation reports show. I am holding SPY put options heading into Friday. I am expecting a lower day and lower close.
Potential Market Moving Events
This week the primary events that could see markets shift are on Friday.
Friday:
8:30 Monthly Consumer Price Index
8:30 Core CPI
8:30 CPI year-over-year
8:30 Core CPI year-over-year
10:00 5 Year Inflation expectations
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
