On Monday stocks spent the morning building on Friday’s big gain and as stock heading into the lunch hour the SPX was reaching 3950. But hawkish comments from Atlanta Fed President Raphael Bostic about holding rates above 5% for what he terms a “long time” broke the rally and the remainder of the day sellers pushed stocks lower. By the close the rally was lost and the S&P closed down 3 points. The loss was minor but the dramatic reversal continues to show that investors are nervous whenever the Fed talks tough as they obviously are trying to keep stocks under pressure.
The S&P closed down 3 points at 3892. The NASDAQ remained positive, closing up 66 points at 10635.
During the day a new unconfirmed up signal was generated by the Moving Average Convergence / Divergence technical indicator.
Let’s review the closing technical indicators from the SPX on Mon Jan 9 to see what to expect for Tue Jan 10 2023.
Stock Market Outlook Chart Comments At The Close on Mon Jan 9 2023
On Mon Jan 9 the S&P closed above the 21 day moving average and below the 50, 100 and 200 day. This remains bearish but is constructive. Intraday the index had moved above the 50 and 100 day moving averages.
The closing candlestick is bullish for Tuesday.
The Upper Bollinger Band is turning lower which is bearish. The Lower Bollinger Band is turning sideways which is also bearish and could be preparing for a potential Bollinger Bands Squeeze this week.
The 200, 21 and 100 day moving averages are falling. The 50 day is trending sideways. This is all bearish.
The 21 day moving average fell below the 100 day moving average on Friday Dec 30 and below the 50 day on Wednesday Jan 4. Both are bearish signals and they wiped out the last two remaining up signals from the moving averages.
At present there are are 6 down signals in place since April 24 and no up signals.
The chart is 80% bearish for Tuesday which is slightly more bearish than the outlook was for Monday.
Stock Market Outlook review of Mon Jan 9 2023
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising slightly and positive.
- 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 Mon Jan 9 2023 a new unconfirmed up signal was issued. The histogram also is 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 falling and negative.
- 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 rising sharply.
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 unchanged but still positive.
- 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 almost 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:
4050 is resistance
4030 is resistance
4025 is resistance
4000 is resistance
3975 is resistance
3965 is resistance
3950 is resistance
3925 is resistance
3900 is resistance
3875 is resistance
3850 is good support
3830 is good 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 Jan 10 2023
For Tuesday, stocks should try another rally attempt. The technical indicators are now mixed following the loss of Monday’s rally. The MACD indicator gave an unconfirmed up signal on Monday and we may see this signal confirmed on Tuesday.
Potential Economic and Political Market Moving Events
On Tuesday Fed Chair Powell speaks in Sweden. It is doubtful anything said will move markets today. On Wednesday there are no economic reports but on Thursday with get the Core CPI reports and continuing jobless claims. On Friday we get the University of Michigan 1 and 5 year inflation outlooks. Thursday and Friday could be quite choppy.
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
