I hope everyone enjoyed their Christmas holiday!
On Friday Dec 23, markets moved higher ahead of the Christmas holiday weekend, on light volume.
The S&P rose 22 points closing at 3844, just below the 3850 support level. The NASDAQ rose 21 points to close at 10497.
Volumes were low across all stocks and Tuesday will see better volume but still lower than average. Historically the first day back after the Christmas holiday has seen stocks higher.
Let’s review the closing technical indicators from the SPX on Friday Dec 23 to see what to expect for Tue Dec 27 2022 as we enter the final trading week for the year.
Stock Market Outlook Chart Comments At The Close on Fri Dec 23 2022
On Friday Dec 23 the S&P closed below all moving averages but once again above the Lower Bollinger Band. This is bearish.
The closing candlestick is however bullish for Tuesday.
The Upper Bollinger Band is turning lower which is bearish.
The 200, 21 and 100 day moving averages are falling. The 50 day is still climbing.
The 21 day moving average is falling rapidly and this week could fall below the 100 day which would be a new down signal.
There are now 4 down signals in place since April 24 and two up signals.
The chart is 65% bearish for Tuesday.
Stock Market Outlook review of Dec 23 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 a down signal Tuesday Dec 6 2022. On Friday Dec 23 the down signal lost more strength. The histogram also lost 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 still has an up signal in place and moving out of oversold.
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 and negative.
- 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 unchanged and 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:
4050 is resistance
4030 is resistance
4025 is light support
4000 is light support
3975 is light support
3965 is light support
3950 is good support
3925 is light support
3900 is good support
3875 is light support
3850 is light support
3830 is light support
3810 is light support
3800 is good support
3775 is good support
3750 is good support
3730 is light support
3725 is light support
3715 is light support
3700 is good support
3685 is light support
Stock Market Outlook for Tomorrow – Tue Dec 27 2022
For Tuesday the technical indicators are showing signs of trying to move higher but remain for the most part weak and cautionary. Tuesday though could still see stocks try to move higher despite the weakness. Historically the first trading day after the long Christmas holiday weekend has tended to end higher. Momentum is rising but it remains negative which indicates that at present, any bounce should be used to close positions and take profits.
The rise on Friday was on very low volume ahead of the Christmas holiday. This low volume is typical. Tuesday often also has lower than average volume which sometimes accounts for the indexes rising by the close. Tuesday also marks historically the start of the so-called Santa Claus Rally period which runs this week and into the first few trading days of January. How strong a rally we might get is anyone’s guess, but the technical indicators are pointing to a higher day on Tuesday but again, cautionary signals are evident.
Potential Economic and Political Market Moving Events
On Tuesday there are no reports that should move markets. The lack of economic reports should help the bulls push stocks higher today.
Tuesday:
9:00 S&P Case-Shiller home price index
9:00 FHFA home price index
Stock Market Outlook Archives
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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
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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
