On Friday stock indexes hung on until the final half hour when sellers pushed indexes lower. The S&P had been holding the 3960 level but closed at 3934, dropping 26 points in half an hour.
The NASDAQ had been holding the 11080 level and then in the final half hour plunged 76 points to end the day at 11004.
Investors spent much of the past week focused on recession fears. This week the focus shifts to Tuesday’s core inflation report and Wednesday’s Fed interest rate report.
Let’s review the technical indicators at the close on Fri Dec 9 2022 to see what to expect for Mon Dec 12 2022.
Stock Market Outlook Chart Comments At The Close on Fri Dec 9 2022
On Friday the S&P closed below the 200 day and 21 day moving average and end at the 100 day. This is bearish. The closing candlestick is bearish but also once again, signaling a potential for the market to try to bounce on Monday.
The Bollinger Bands have moved into a Bollinger Bands Squeeze to start the week off. At present the squeeze looks set to send stocks lower but a lot will depend on Tuesday’s inflation report and Wednesday’s Fed rate increase. If the inflation report is lower than expect and the Fed raises rates half a point, stocks could rally.
A second up signal was generated on Wednesday Nov 30, with the 21 day moving above the 100 day. The 21 day is still climbing toward the 200 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 is still 80% bearish for Monday.
Stock Market Outlook review of Fri Dec 9 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling 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 Friday the down signal gained more 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 falling 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 and intoioversold readings.
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 rising.
- 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 – Mon Dec 12 2022
For Monday the technical indicators are still bearish and are showing further weakness. Tuesday we get the latest core inflation report and on Wednesday the Fed’s latest interest rate increase. At present the market looks positioned to move lower but on Monday we may see weakness but a sideways pattern until we get Tuesday’s report.
Bearish indicators are continuing to gain strength and the rate of change on Friday ended the day signaling that we may see some stronger moves early this week.
Potential Economic and Political Market Moving Events
Tuesday and Wednesday have the most impact on market direction this week.
Monday:
11:00 NY Fed 1 year and 5 year inflation expectations
2:00 Federal Budget
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
