Comments from a number of Fed officials today confused many investors as they at times painted a different picture than Fed Chair Powell. Comments from Fed governor Christopher Waller indicated that he felt interest rates would need to be kept restrictive for a “few years” to beat inflation. Many investors were in the camp of lower interest rates by the end of the year or certainly into 2024. This bled yesterday’s rally from the markets and saw the gains from Tuesday’s rally given back.
The S&P lost 46 points, or 1.1%, to close at 4118. This almost wiped out Tuesday’s gain of 53 points.
The NASDAQ dropped 203 points for a 1.7% decline to end the day at 11,910. This also came close to wiping out Tuesday’s gain of 226 points.
Markets closed near their lows of the day.
Let’s review the closing technical indicators from the SPX on Wed Feb 8 to see what to expect for Thu Feb 9.
Stock Market Outlook Chart Comments At The Close on Wed Feb 8 2023
On Wed Feb 8 the index closed back at 4118 but trading volumes were lower on both the S&P and NASDAQ which is a good sign on a pullback. The closing candlestick is below the Upper Bollinger Band but above the 200 day moving average.
The closing candlestick is bearish for Thursday but is showing that the overbought condition is fading.
The Upper Bollinger Band is back climbing which is bullish. The Lower Bollinger Band is rising which is also bullish.
The 200 day moving average is rising which is bullish. All the major averages continue rising.
The 21 day moving average is above the 200 day with a new up signal on Friday Feb 3.
At present there are 2 down signals in place since April 24 and 4 up signals since Jan 13.
The chart is 70% bullish for Thursday.
Stock Market Outlook review of Wed Feb 8 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday Jan 9. The up signal lost strength on Wednesday as did the histogram.
- 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 no longer overbought..
- 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 overbought.
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 no longer overbought.
- 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 but positive.
- 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
3875 is light support
3850 is good support
3830 is good support
3810 is light support
3800 is good support
3775 is good support
3750 is good support
Stock Market Outlook for Tomorrow – Thu Feb 9 2023
The technical indicators at the close on Wednesday are showing the index is no longer overbought. They are also decidedly lower and showing more falling readings. There is a general weakness in the market as of Wednesday’s close as investors are undecided on the direction of interest rates. As well the surprise drop in Alphabet Stock (GOOGL) of 7.6% caught investors by surprise and that too weighed on the markets.
For Thursday there will be further weakness and a dip below 4100. The close will be negative but the rally is not over.
Potential Economic and Political Market Moving Events
On Thursday the Weekly Initial Unemployment Insurance Claims are expected to be slightly higher at 190,000
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims
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
