Friday was a strong day for equities with all 3 indexes opening higher than Thursday’s close, dipping in the first half hour but finding buyers. By the end of the lunch hour the S&P was up to 4380 just 20 points below the 200 day moving average. The remainder of the afternoon was a sideways pattern with a final push into the close that saw the SPX end the day at 4384, back to where the index had started the day last Friday (Feb 18). It was the strongest day for 2022 and futures early Sunday night (Feb 27) ahead of Monday’s open show a large drop to start the day on Monday. Investors are trying to understand the continuing war with all the ramifications of stepped up sanctions on the weekend and Russian President Putin placing his nuclear deterrence forces on high alert. However it is too early to think Monday will be a strong down day. A lot can happen before markets resume trading on Monday morning.
The NASDAQ rose 96 points on Friday for a 2.24% gain. The NASDAQ rose 1.6% for a 221 point gain to end the day at 13694.
The Dow Jones rose 2.5% to close back above 34,000 at 34,058.
Thursday and Friday were dramatic days in a highly volatile environment. This type of action in equities is not common and while the early morning futures show Friday’s rally may be given back, the technical indicators are advising a different outlook.
Let’s review Friday’s close to see what Monday, the final trading day of February, should look like.
Stock Market Outlook Chart Comments At The Close on Fri Feb 25 2022
The S&P chart in just two trading sessions has seen dramatic improvements. The closing candlestick on Friday indicates a morning drop or weakness may occur but a bounce back is still expected. The chance for a higher close is high for Monday and if that fails, Tuesday should be stronger.
There are a number of changes in the chart and in the technical indicators.
The Upper Bollinger Band is turning back up which is bullish. Note as well the Lower Bollinger Band is turning sideways which is also bullish. If it turns back up, the index will move higher.
The 21 day moving average has stopped falling and the 100 day moving average is starting to turn up as well. The 50 day is still turning lower which is bearish.
The 200 day moving average is still holding the 4400 level which is also bullish.
There are no new up signals in the chart but you can see from the observations above that more bullish signals are building.
The SPX chart is still quite bearish but Thursday’s drop to 4114 found ready buyers which is bullish and may signal a second bottom to the current correction. The char looks the best it has been in many days.
Stock market outlook review of Fri Feb 25 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is negative and rising.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a confirmed down signal on Thursday Feb 17 2022 last week. On Friday Feb 25 2022 the down signal was cut almost in half. The MACD histogram is showing strength to the upside is building.
- 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 positive and shot higher on Friday.
- 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 an up signal in place and is moving higher out of oversold signals.
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 rising from being oversold for a second day on Friday.
- 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 is at the best it has been since January 11.
- 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:
4500 is resistance
4490 is light resistance
4475 is light resistance
4450 is light support
4400 is good support and the 200 day moving average
4370 is light support
4350 is light support
4300 is good support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
4150 is good support
4000 is good support
Stock Market Outlook for Tomorrow – Mon Feb 28 2022
Looking at the support and resistance levels in the chart above, you can see that the SPX now has three good support levels in place, all below where the index closed on Friday. These are 4200, 4150 and 4000. This will help the index, if selling erupts further and the index tumbles to any of those levels again.
For Monday the chart and technical indicators are showing strong improvements in signals to the upside. That means while the futures show a large drop to start the day on Monday, we may not see that happen. Instead we probably will see a dip to commence the day or early morning but in general a positive close is expected on Monday.
No one can time with 100% accuracy when a correction ends but signals from Thursday and Friday are suggesting investors may want to make some small trades on Monday in some stocks they follow.
Stock Market Outlook Archives
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Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
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Morning Investing Strategy Notes for Tue Apr 28 2026
