FOMC Minutes mid-afternoon on Wednesday shot stocks higher with all three indexes ending the day positive.
The S&P ended up 37 points at 3978.73. This left the week up 77 points heading into Thursday.
The NASDAQ rose 170 points, almost matching Monday’s gain and ending the day at 11,434. This left the index up 80 points on the week ahead of Thursday’s trading.
Let’s review the closing technical indicators from Wednesday’s afternoon rally to see if stocks can rise further on Thursday.
Stock Market Outlook Chart Comments At The Close on Wed May 25 2022
On Wednesday the closing candlestick is signaling a bearish bounce for a fourth time. Once again this means Thursday could see a further push higher for the index, but the warning of a dip back is still showing in the candlestick.
The Upper Bollinger Band is falling sharply and is now below both the 200 and 100 day moving averages and falling below the 50 day. This is bearish and advises there is still more risk to the downside.
The Lower Bollinger Band is finally turning sideways.
The 21 day moving average is finally turning sideways which could signal a trend change coming.
The 200, 100 and 50 day moving averages are all falling lower and the 200 day is leading the market. This is bearish.
The chart is 90% bearish for Thursday. There is a chance for the rally to push higher on Thursday but caution is still being advised by the technical indicators.
Stock Market Outlook review of Wed May 25 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and positive. This is the first time positive since April 5.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal Friday April 8. On Wednesday MACD issued an unconfirmed up signal. The MACD histogram turned positive.
- 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.
- 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 heading higher.
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:
4400 is resistance
4370 is light support
4350 is light resistance
4300 is light resistance
4290 is light resistance
4270 is light resistance
4250 is resistance
4225 is light resistance
4200 is light resistance
4150 is light resistance
4100 is light resistance
4050 is light resistance
4025 is light support
4000 was good support
3975 is light support and is a decline of 17.5%
3900 is good support and is a decline of 19%
3850 is good support and is a decline of 20%
3600 is good support at is a decline of 25%
Stock Market Outlook for Tomorrow – Thu May 26 2022
For Thu May 26 2022 the technical indicators have changed bias to the bullish side for stocks. The MACD indicator issued a new up signal, the first since April 8. While unconfirmed, it won’t take much to confirm the signal up. Momentum has finally turned positive for the first time since April 5. These are strong signal to the upside.
Thursday has a good chance for the index to continue higher although it will face selling pressure following NVIDIA Stock (NVDA) disappointing earnings and weak outlook on Wednesday after the close. This could sink the rally at the open but it may find buyers after an initial dip. That should move the index higher by the close.
Potential Market Moving Events
On Wednesday durable goods orders were lower than expected which many analysts saw as an indication the economy is slowing.
Wednesday:
8:30 Durable Goods Orders were 0.4% below estimates of 0.7%.
2:00 FOMC minutes moved markets higher
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims
10:00 Pending Home Sales
Friday:
8:30 PCE Inflation / core and year-over-year
8:30 Real Disposable Income
10:00 Consumer Sentiment Index from UofM
10:00 5 Year Inflation Expectations
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
