On Friday the S&P opened lower and spent the day trying to build enough momentum to bounce back. The afternoon saw an attempt but the end result was the index closed down 11 points to end the day at 4079.
The NASDAQ ended Friday down 68 points at 11,787.
Friday marked a second week of losses for the S&P. The NASDAQ managed a gain of 69 points on the week. Losses for the past two weeks have been small but this week investors are dealing with retail sales and the FOMC latest minutes on Wednesday afternoon.
Let’s review the closing technical indicators from Fri Feb 17 to see if there is a chance of a bounce on Tue Feb 21.
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Stock Market Outlook Chart Comments At The Close on Fri Feb 21 2023
On Fri Feb 17 2023 the index closed lower. The closing candlestick is below the Upper Bollinger Band and now below the 21 day moving average but still above the 200 day moving average.
The closing candlestick is bearish for Tuesday but also points to a potential bounce attempt to retake the 21 day moving average.
The Upper Bollinger Band is turned lower while the Lower Bollinger Band turned sharply higher and is above the 100 and 50 day moving average which is bearish. This could end up in a Bollinger Bands Squeeze later this week and should be watched.
The 200 day moving average is rising which is bullish. All the remaining major averages are still rising including the 21 day.
At present there are 2 down signals in place since April 24 and 4 up signals since Jan 13.
The chart is only 40% bullish for Tuesday.
Stock Market Outlook review of Fri Feb 17 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising but negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) down signal gained strength on Friday. The MACD histogram also gained 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 has a down 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 falling sharply and negative. This supports the MACD down signal call.
- 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 and positive. This can signal both a down or up move. At present the indicator is signaling we will see wider moves on Tuesday.
- 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
Stock Market Outlook for Tomorrow – Tue Feb 21 2023
On Friday the SPX closed back into support levels. 4050 on Friday was reached three times intraday and held up. We will see it tested again on Tuesday. The S&P is now into support levels which you can see in the section “Support and Resistance Levels” above. This should slow selling further.
While the technical indicators are signaling a lower day on Tuesday, there are still those indicators that advise further moves lower on Tuesday will be slowed as there are buyers still lurking and looking for supposed “bargains”.
The S&P Bollinger Bands need to be watched as they could be getting ready to signal a Bollinger Bands Squeeze followed by a potential move lower. For Tuesday watch for a lower open, a bounce attempt or more than one, but a negative close.
Potential Economic and Political Market Moving Events
On Tuesday there are a couple of events to be aware of. The bigger event this week is on Wednesday with the FOMC minutes of the Feb 1 meeting.
Tuesday:
9:45 S&P flash services PMI
9:45 S&P flash manufacturing PMI
10:00 Existing home sales
Wednesday:
2:00 FOMC minutes of Feb 1 meeting
Stock Market Outlook Archives
Morning Investing Strategy Notes for Tue Jun 10 2025
Stock Market Outlook For Tue Jun 10 2025 – Choppy – Dips Likely But Higher
Morning Investing Strategy Notes for Mon Jun 9 2025
Stock Market Outlook For Mon Jun 9 2025 – Choppy With Bias Higher
Morning Investing Strategy Notes for Fri Jun 6 2025
Stock Market Outlook For Fri Jun 6 2025 – All About May Jobs Numbers
Morning Investing Strategy Notes for Thu Jun 5 2025
Stock Market Outlook For Thu Jun 5 2025 – Weakness – Dips Likely – Still Bullish
Morning Investing Strategy Notes for Wed Jun 4 2025
Stock Market Outlook For Wed Jun 4 2025 – Mixed Outlook But Still Bullish
Morning Investing Strategy Notes for Tue Jun 3 2025
Stock Market Outlook For Tue Jun 3 2025 – Weakness Continuing
