On Friday news that some Fed officials were becoming concerned that interest rates were rising perhaps too quickly or too high brought buyers, once again, back into stocks. Treasury yields dipped as did the dollar which was seen as a positive for stocks. Trading volume on New York jumped to 5.2 billion the highest level since Oct 4. New highs jumped to 40 but new lows rose to 548 as almost 30% of all stocks on New York continued to move lower.
The NASDAQ saw 4.9 billion shares traded which was average for the week and while new highs stayed steady at 72, new 52 week lows still rose, reaching 454 which was the highest number of new lows since Thursday Oct 13.
That means both indexes saw mixed signals and many buyers rushing into the same stocks rather than a widening market breadth. Again the signs of a bear market bounce were quite evident.
Still it was another excellent rally with the S&P up 87 points to close at 3752 and up 169 points on the week, marking the best week since the third week of June which saw a gain of 237 points.
The NASDAQ rose 245 points to close the week at 10,859.72. For the week, the NASDAQ added 538 points, also the best gain since the third week of June when it added in 809 points and closed at 11607.
Let’s review the closing technical indicators from Friday Oct 21 to see what to expect for the start of the final week of October 2022. This week many big name stocks are reporting earnings.
Stock Market Outlook Chart Comments At The Close on Fri Oct 21 2022
On Friday the S&P closing candlestick is bullish and well above the 21 day moving average. The candlestick shows that the little selling there was in the early morning was quickly bought and the index climbed higher all day to close at the highs of the day. Normally this is followed by some weakness the morning of the next trading day and Monday could very well see some dips. However the candlestick also advises that dips will be bought on Monday and the index will close higher.
The Bollinger Bands Squeeze had looked more bearish last week but this week it is pointing to a potential move higher for the index.
The 21 day moving average is once again trying to turn sideways and end the descent.
The Upper Bollinger Band continued falling but it too is starting to turn sideways. The Lower Bollinger Band is now turning sideways and no longer rising. This is often bearish.
All the remaining moving averages are still falling which is bearish.
There are now 7 down signals in place since April and no up signals.
The chart is 80% bearish for Monday.
Stock Market Outlook review of Fri Oct 21 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thursday Oct 16. On Friday the up signal gained strength. The histogram also gained 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 positive.
- 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 weaker up signal in place. As long as the index closes higher, the up signal could gain more strength.
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 sharply and positive. It is nearing overbought 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 rising and just slightly 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:
3800 is resistance
3775 is light resistance
3750 is light resistance
3730 is light resistance
3700 is light resistance
3675 is light support
3650 is light support
3625 is light support
3600 is good support and is a decline of 25%
3585 is light support
3550 is good support
3530 is light support
3515 is light support
3500 is good support and is a decline of 27%
Stock Market Outlook for Tomorrow – Mon Oct 24 2022
This week is all about some big cap earnings from the likes of names like Apple, Microsoft, McDonalds, 3M, Coca Cola, Archer Daniels Midland, GE, GM and dozens more. Normally we can expect volatility this week, but if earnings meet or especially exceed expectations, the index will move higher.
This week we need to watch the number of new lows along with trading volume. New lows need to pullback from Friday’s higher numbers on both indexes. That will be key to a potential continuation of Friday’s rally.
I had expected a bounce on Friday and then a drop back but instead the initial bounce pulled back from 3710 to 3670 and then took off. I bought SPY puts in the initial rally but ended selling them as the dip turned higher and buying volume rose steadily. It was obvious there would be no further drop especially with Fed comments which many wondered if they were being made to soothe the market a bit. Fed officials have given no indication they are changing from their goal of raising rates further until there are meaningful signs of a peak in inflation. The next Fed meeting is on November 2 and the mid-terms are on November 8.
On Monday I expect dips especially in the morning but a higher close on the day.
Potential Market Moving Events
This week the best market moving events are the earnings announcements. However there are a number of economic events that may have some impact especially on Friday when investors are treated to a number of inflation reports.
Monday
9:45 S&P manufacturing PMI
9:45 S&P services PMI
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
