Wednesday was a strong day for the indexes. The S&P rose 65 points to end the day at 4587 in a solid day with good buying volume.
The NASDAQ rose 295 points to add 2% to the index. It closed at 14,490 on a day with 86% of all the volume traded, moving higher.
Let’s review the technical indicators from Wed Feb 9 to see what investors should expect for Thu Feb 10.
Stock Market Outlook Chart Comments At The Close on Wed Feb 9 2022
The closing candlestick on Wednesday is bullish for Thursday. The candlestick closed above the 21 and 100 day moving averages.
The 21 day moving average is turning sideways which is bullish.
The Upper Bollinger Band is still falling sharply which is quite bearish and suggests more selling is coming.
The Lower Bollinger Band is still trending sideways which is turning neutral as it continues to hold the market from dropping. A close above the 50 day on Thursday will begin to turn the Lower Bollinger Band higher. If that occurs, then we could see the Lower Bollinger Band higher and the Upper Bollinger Band lower, entering a Bollinger Bands Squeeze next week. There is a good chance, as long as there is no invasion of Ukraine, such a Bollinger Bands Squeeze could be bullish.
The 50 and 100 day moving averages are falling which is bearish however the 200 day moving average is back rising.
The chart has two down signals but there is a good chance the 50 day may not reach and fall below the 100 day moving average. This would be a bullish signal should it occur. For Thursday the chart is still bearish but there are growing signals that are bullish.
Stock Market Outlook review of Wed Feb 9 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a confirmed up signal on Friday Feb 4. The up signal on Wednesday was stronger.
- 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 positive and rising which is bullish.
- 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 room to move higher before reaching overbought signals. This is bullish.
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:
4800 is resistance
4725 is resistance
4700 is resistance
4670 is resistance
4655 is resistance
4600 is resistance
4550 is light support
4525 is light support
4500 is good support
4490 is light support
4475 is light support
4450 is medium support
4400 is good support and the 200 day moving average
4370 is light support
4350 is light support
4300 is good support
4290 is light support
4270 is light support
4250 is good support
4225 is light support
4200 is good support
Stock Market Outlook for Tomorrow – Thu Feb 10 2022
For Thursday the all technical indicators have turned bullish. Often this means we should expect some selling, when al the indicators are in agreement but for Thursday the outlook does indeed look end the day higher.
The Consumer Price Index report is released on Thursday and if it shows higher inflation than expected we could see the indexes slip. However if inflation is lower than expected it will support the rally higher.
However, even if Thursday has trouble climbing further in the face of rising inflation, there is still more upside left to the current trend.
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