Wednesday was all about the FOMC minutes that were released in the afternoon. In the end, they showed nothing new for investors. The SPX had climbed to its highest level by 2:06 PM and then begin a decline which was choppy but steady to just below 3980. The final 15 minutes saw a flurry of buying to close at 3991, down just 6 points on the day. The NASDAQ closed positive on the day, up 14 points to end the day at 11,507.
After hours NVIDIA Stock (NVDA) released stunning earnings and the stock shot higher by over $18. This is sure to support stocks on Thursday.
What investors found through the FOMC minutes was primarily confirmation that the large interest rate hikes are most likely over and the majority of Fed members felt a quarter point rise in January was warranted to allow time to review more data. A half point rate rise may be in the cards for the next rate meeting but only if the data supports it and at present, the Fed is watching the data roll in. In other words there was nothing of consequence that should see the index tumble even deeper. While the outlook is not one where the Fed will likely cut interest rates this year, the inflation outlook does look like the Fed has done most of the interest rate hikes last year and this year a few more are likely but the “heavy lifting” is done. So does that mean the sell-off is overdone? Does it mean the chance of slipping to the October lows is unlikely unless something completely new hits the markets? Overall I think it does appear to be the case and while the index could slip still down to 3950 or even 3900, the FOMC minutes do not give any compelling reason for stocks to fall at present. If data starts to come in that points to an increasing chance of a recession, that will probably send stocks lower, but as low as we saw in October last year would need an unknown event. The use of a nuclear weapon in the Russia-Ukraine conflict would be such an event. I believe its unlikely but I’m just an investor and not in politics or a military “expert”. My opinion does not matter on the likelihood of such events.
While Tuesday saw bears come roaring back to life, Wednesday’s trading was subdued and despite the index slipping lower to 3980, there was a lot of buying happening. Personally I thought the trading on Wednesday was encouraging but I still went ahead of put in place some protection for that “just in case” scenario.
Let’s review the closing technical indicators from Wed Feb 22 2023 to see what they advise we should be watching for on Thu Feb 23 2023.
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Stock Market Outlook Chart Comments At The Close on Wed Feb 22 2023
On Wednesday the index closed just below major support at 4000 and just below the 200 day moving average. The closing candlestick ended the day above the Lower Bollinger Band. It is bearish but also signaling there is a chance of another bounce attempt on Thursday.
If you look closely you can also see that the closing candlestick on Wednesday pressured the Lower Bollinger Band to turn lower. That helped to turn the Upper Bollinger Band higher. A Bollinger Bands Squeeze is not inevitable which while still being neutral, is a positive for stocks.
The 200 day moving average is rising which is bullish. The 21 day moving average is turning sideways while the 50 and 100 day moving averages are still rising. The 21 day is not falling as of yet, which is also a positive for stocks.
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.
The chart is still almost 70% bearish for Thursday but there is some strength in the chart.
Stock Market Outlook review of Wed Feb 22 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and negative. If it falls much lower it will reach readings like those in December that signaled the rally’s start. The momentum indicator needs to be watched daily.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) down signal gained strength on Wednesday. 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 falling and negative. It is nearing oversold readings.
- 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. Often we can look forward to a bounce when the readings are this negative for the Slow Stochastic.
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 has fallen sharply but on Wednesday it was unchanged which is a bullish signal. It is 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 turned negative. It is not hinting at a bounce coming for Thursday but instead is signaling lower prices lie ahead for stocks.
- 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 – Thu Feb 23 2023
For Thursday NVIDIA Stock (NVDA) should pop and that will help the tech heavy NASDAQ to also pop. That should be enough to get a second bounce attempt underway. It may not hold and the day could still end negative, but investors should be pleased with Wednesday’s trading action which was not as negative as feared by many investors. On New York 46% of all stocks were rising on Wednesday and 49% of all trades were to the upside. On the NASDAQ 53% of all volume was being traded higher and 44% of all stocks were rising. These are decent percentages considering how concerned many analysts and investors were on Tuesday. The market breadth will be supportive of another bounce attempt on Thursday.
The chance of the index falling intraday to 3950 is still with us but that could mark the low point for Thursday. Overall the index is expected to stage a rebound to retake 4000 and close above it.
Potential Economic and Political Market Moving Events
On Thursday we get the Weekly Initial Unemployment Insurance Claims which are expected to come in 197,000. The GDP number is expected to be unchanged at 2.9%.
Wednesday:
8:30 Weekly Initial Unemployment Insurance Claims
8:30 GDP – as long as the number is not a lot higher than 2.9% the outlook for a second bounce attempt is good. If the GDP number is too high, investors will worry again that the Fed has to react with much higher interest rates to counter inflation. That will see stocks move lower and we will know this number before the open on Thursday.
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
