Stock Market Outlook for Thu Dec 23 2021 – Sideways With Bias Up

On Wednesday Dec 22 the SPX moved higher throughout the day. In the late afternoon lower volumes ahead of the Christmas holiday saw the index advance sharply higher to end the day at the high, just 4 points shy of 4700. The 47 point advance on Wednesday left the index back within easy striking distance of the 52 week high.

The NASDAQ rose 180 points closing at 15,521 on low volume but in a broad-based advance.

Thursday is the final trading day before the Christmas holiday break. Normally low volumes and limited trading make for a dull day.

Let’s review the closing technical indicators from Wednesday to see what to expect for Thursday.

Stock Market Outlook Chart Comments At The Close on Wed Dec 22 2021 

The closing candlestick on Wednesday is bullish for a third day of gains on Thursday. The index on Wednesday closed at the day’s high so it would be natural to see some weakness Thursday morning before stocks move higher in the afternoon.

The 21 day moving average is still falling which is bearish.

The Lower Bollinger Band fell below the 100 day moving average on Wednesday which is bullish.

Meanwhile the 50, 100 and 200 day moving averages are still climbing which is bullish.

For Thursday the chart is almost completely bullish.

Stock Market Outlook review of Wed Dec 22 2021

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 a down up signal on Fri Dec 17 2021 . On Wednesday, the down signal was almost gone from the technical indicator.

• 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 an up signal in place.

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.

• 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:

4725 is resistance

4700 is resistance

4670 is support

4655 is light support.

4600 is good support

4550 is light support

4525 is light support

4500 is support

 Stock Market Outlook for Tomorrow – Thu Dec 23 2021 

The rally on Wednesday was not as strong as we saw Tuesday but lower volumes played a significant role in the afternoon at pushing the index higher.

Thursday is the final trading day of this shortened week, ahead of the Christmas holiday. That means investors will see low volumes.

These low volumes will assist the index as it will trade sideways most of the day but keep an up bias in place. A higher close for a third day is expected.

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