Stock Market Outlook for Wed Jan 12 2022 – Still Higher

Stock Market Outlook - Still Higher

Tuesday started with an early morning dip, but as expected, the dip was an opportunity to setup trades. The market continued to climb and by the close it was sitting just below the high of the day at 4713, up 42 points. The NASDAQ rose for a second day climbing 210 points, the best day since December 27.

Let’s review Tuesday’s closing technical indicators to see what to expect for Wednesday.


Stock Market Outlook Chart Comments At The Close on Tue Jan 11 2022 

The closing candlestick on Tuesday was back above the 50 day and sitting at the 21 day. The close was bullish for Wednesday.

The Upper Bollinger Band stayed sideways, a bullish signal. The Lower Bollinger Band looks ready to fall back below the 100 day moving average, which is also bullish.

Meanwhile the 21 day moving average is still turning lower which is bearish but the 50 day is turning back up. This is bullish.

The 100 and 200 day moving averages are still climbing which is bullish.

For Wednesday the signals are strongly bullish again.

Stock Market Outlook review of Tue Jan 11 2022

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising and is negative.

  • Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an down signal on Thursday Jan 6. On Tuesday the down signal was weaker by the close.

  • 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.

  • 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 weak down signal in place but is ready to issue an up signal.

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 sharply and no longer oversold.

  • 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 from Monday’s close.

  • 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 support

4670 is support

4655 is light support.

4600 is good support

4550 is light support

4525 is light support

4500 is support


 Stock Market Outlook for Tomorrow – Wed Jan 12 2022 

For Wednesday the technical indicators are supportive of any day of rallying. The closing candlestick on Tuesday is also bullish although it does indicate there could be some weakness in the early to mid-morning. For Wednesday though, any weakness is a chance to setup more trades. The close will be still higher for the S&P.

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