Thursday saw the SPX started the day with a move down to the 4450 valuation by 12:50, just slightly lower than Wednesday’s lowest point. But when selling thinned out, buyers stepped back in and pushed by the index back up. By 3:15 the SPX was at 4520. The final 15 minutes saw large selling volume which pushed the index back to the important 4500 level, where the index closed. It was a rather wild roller coaster day of trading and on high volume.
The NASDAQ had a wilder day, falling to just below 13700 before staging an impressive rebound on high volume. The rally by late day had reached within 30 points of retaking 14,000 before late day selling saw the index closed at 13897.
Both rallies were impressive, but the NASDAQ rally recovered almost 300 points which was impressive.
Let’s review the technical signals from Thursday’s close to see what investors should expect for Friday as we end what has been a wild week for stocks.
Stock Market Outlook Chart Comments At The Close on Thu Apr 7 2022
The 21 day moving average continued to climb above the 50 and 200 day moving average which is bullish. It is now just below the 100 day and ready to move above it. This will be another up signal.
As well the 50 day moving average is moving away from the 200 day which is also bullish and the 100 day is still trending sideways, which is also bullish.
The closing candlestick on Thursday ended back above the 100 day moving average. The closing candlestick is bearish for Friday.
Meanwhile the Upper Bollinger Band in still turning lower and the Lower Bollinger Band is turning sharply higher. This is bearish.
The 200 day moving average is back at the 4400 level which is bullish.
The SPX still has 4 down signals in place and 1 up signal.
The chart is now almost 50% bullish but there are concerns for next week that need to be watched including the Bollinger Bands.
Stock Market Outlook review of Thu Apr 7 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and has turned negative.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal Wed Mar 16 2022. On Thursday the up signal was almost gone and the histogram shows very little strength to the up signal. We could see a new down signal by the close of Friday.
- 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 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 a strong 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 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 falling which normally indicates that price action on Friday or Monday will not be as great as we saw on Tuesday and Wednesday. That could mean a move lower in the index may not be very deep on Friday.
- 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:
4650 is resistance
4640 is resistance
4625 is resistance
4600 is strong resistance
4590 is resistance
4575 is light support
4560 is support
4550 is light support
4525 is light support
4500 is support
4490 is light support
4475 is light support
4450 is light support
4400 is support
4370 is light support
4350 is light support.
4300 is good support
Stock Market Outlook for Tomorrow – Fri Apr 8 2022
On Thursday the S&P ended the day right back at the strong 4500 support level. This is excellent for the bulls. The closing candlestick however is bearish and indicates Friday could be choppy with dips as well as spikes but a lower close.
The rally back from the morning lows on Thursday should see some follow through in the morning on Friday. Whether it can hold however is difficult to assess. The technical indicators are a bit divided but most are signaling the day will end lower.
Fed President Bullard was not as overly hawkish as other Fed Presidents who had spoken this week and that helped stocks. Still he made it known that inflation is a concern and they must act quickly.
Weekly jobless claims came in at 166,000 the lowest since late 1968 and signal that the labor market is incredible tight.
For Friday the technical indicators show investors should expect a choppy day with a few spikes and negative close ahead of the weekend.
Potential Market Moving Events
10:00 Whole inventories which are expected to come in a 2.1% which is unchanged.
Stock Market Outlook Archives
Stock Market Outlook for Fri Nov 15 2024 – Choppy With Bias Lower
Stock Market Outlook for Thu Nov 14 2024 – Choppy – Dips Possible But Higher Close
Morning Investing Strategy Notes for Thu Nov 14 2024
Morning Investing Strategy Notes for Wed Nov 13 2024
Stock Market Outlook for Wed Nov 13 2024 – Choppy Trading Bias Lower
Morning Investing Strategy Notes for Tue Nov 12 2024
Stock Market Outlook for Tue Nov 12 2024 – Overbought – Dips Likely But Bullish
Morning Investing Strategy Notes for Mon Nov 11 2024
Stock Market Outlook for Mon Nov 11 2024 – Overbought – Higher Still
Morning Investing Strategy Notes for Fri Nov 8 2024
Stock Market Outlook for Fri Nov 8 2024 – Overbought – Dips Likely But Higher Close
Morning Investing Strategy Notes for Thu Nov 7 2024
Stock Market Outlook for Thu Nov 7 2024 – All About The Fed – Higher
Morning Investing Strategy Notes for Wed Nov 6 2024
Stock Market Outlook for Wed Nov 6 2024 – Election Rally Continues
