With bond markets closed on Monday, stock volumes were lower but indexes continued to be under pressure. The S&P fell to 3588, just 4 points above the 52 week low made on September 30. It closed above that at 3612 but volume was heavily biased to the downside and there were 426 new lows, the largest number of new lows since September 30. 73% of the 3.9 billion shares traded was to the downside.
The NASDAQ fell 110 points on just 4 billion shares traded. It closed the day at 10542. There were 670 new lows on Monday, the highest number since Sep 29. 68% of all volume on the NASDAQ was traded to the downside.
Both indexes on Monday looked vulnerable to move lower. I continued to hold the SPY put trade in the Market Direction Portfolio and the SQQQ shares.
Let’s review Monday’s closing technical indicators to see what to expect for Tuesday Oct 11.
Stock Market Outlook Chart Comments At The Close on Mon Oct 10 2022
At the close of trading the S&P closing candlestick is bearish for Tuesday. The closing candlestick is well below the 21 day moving average and falling toward the Lower Bollinger Band. It signals the market is oversold but gives little evidence a bounce will occur on Tuesday.
The 21 day moving average continued its descent and the 100 day continued moving lower below the 50 day. Both are bearish signals.
The Upper Bollinger Band continued falling below the 200 day moving average signaling stocks will move lower. The Lower Bollinger Band is falling. This is also bearish.
All the moving averages are still falling which is bearish.
There are now 6 down signals in place since April and no up signals.
The chart is 100% bearish for Tuesday. A bearish signal this strong has a good chance of a bounce attempt but with no staying power. The close will be below 3600 on Tuesday.
Stock Market Outlook review of Mon Oct 10 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is unchanged and negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Wednesday Oct 5 2022 . On Monday the up signal was almost gone. The histogram was also almost fully gone on Monday.
- 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 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 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 falling 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:
3800 is resistance
3775 is light resistance
3750 is light resistance
3730 is light resistance
3700 is light resistance
3675 is light support
3650 is light support
3625 is light support
3600 is good support and is a decline of 25%
3585 is light support
3550 is good support
3530 is light support
3515 is light support
3500 is good support and is a decline of 27%
Stock Market Outlook for Tomorrow – Tue Oct 11 2022
For Tuesday the index is setup to move lower. A close below 3600 is likely and will be bearish for Wednesday when the FOMC minutes are released. Wednesday is also important as investors get earnings from PepsiCo which, as a global consumer brand, will give some idea as to how the consumer is, worldwide.
The technical indicators are very bearish but stocks are not extremely oversold as they were when the market bounced early last week. For that reason, the index has more room to fall before reaching an extremely oversold signal again.
Potential Market Moving Events
There are a number of economic reports this week dealing with inflation. The index is setting up for a volatile week. Wednesday investors get the FOMC latest minutes at 2:00 PM. That will move markets. Market direction trades should do well this week. Thursday we get a number of CPI reports.
Tuesday:
6:00 NFIB small-business index
11:00 NY Fed 5 year inflation expectations
Wednesday:
8:30 Producer Price Index
2:00 FOMC minutes released
Stock Market Outlook Archives
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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
