Friday saw stocks dip lower after consumer spending rose along with the Core PCE and New Home Sales. All three pointed to strength in the economy. Investors took this to mean the Fed would probably raise rates half a percent rather than a quarter point at their next meeting.
The SPX closed down 1% at 3970 but broke through 3950 intraday. The NASDAQ fell 1.7% for a 195 point loss and a close at 11395.
Let’s review the closing technical indicators from Fri Feb 24 2023 to see what we should expect for Mon Feb 27 2023.
Stock Market Outlook Chart Comments At The Close on Fri Feb 24 2023
On Friday the index closed below the Lower Bollinger Band and the 200 day moving average. Both are bearish.
The closing candlestick is bearish but also signaling a strong possibility of a bounce attempt on Monday.
The Upper Bollinger Band is starting to turn back up while the Lower Bollinger Band is turning lower. This could end the potential for a Bollinger Bands Squeeze. That means we might see the index try to recover the 200 day to start the final week of February.
The 200 day moving average is rising which is bullish. The 21 day is falling which is bearish. The 50 and 100 day moving averages are still rising.
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 70% bearish for Monday but with a good chance to try to retake the 200 day moving average on Monday. This is the 4000 valuation in the S&P.
Stock Market Outlook review of Fri Feb 24 2023
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) down signal gained strength on Friday. 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 rising 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 is now into oversold levels. It is on the verge of an up signal.
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 and into oversold readings.
- 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 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 – Mon Feb 27 2023
The technical indicators continue to shift for Monday. While a couple of indicators hold out hope for a bounce, the majority are continuing to point lower for stocks to start the week.
For Monday the technical indicators are more negative than positive. The S&P chart is turning more negative but with a signal for a potential bounce. The problem at present is any bounce will find ready sellers so the chance of a rebound at present is small.
Look for a bounce attempt that will eventually fail on Monday.
Potential Economic and Political Market Moving Events
We get a lot of retail companies reporting earnings this week. This should give a good idea as to the state of the economy and the consumer.
Monday:
8:30 Durable Goods Orders
8:30 Core Orders
10:00 Pending Home Sales
10:30 Fed Gov Jefferson speaks
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
