The Stock Market Outlook for Friday July 1 was for stocks to continue to move higher but enter a few days of sideways action as markets consolidate the gains from the four day rally. Friday was expected to return a small gain.
On Friday stocks moved higher in the morning reaching 2108.71 but then turning lower as the day progressed. In the afternoon the S&P slipped below 2100 to 2097.90 before moving back up to close at 2102.95.
S&P Index Close
The S&P index ended the day at 2102.95 for a gain of 4.09.
Dow Jones Index Close
The Dow Jones Index broke to 18000 in the morning but closed at 17,949.37, u 19.38 points.
NASDAQ Index Close
The NASDAQ rose 19.89 points to close at 4,862.57 on Friday.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook -July 1 2016
Stock Market Outlook: Chart Comments:
The S&P closed above all the major moving averages on Friday. It is now within a few points of where the market was before the Brexit vote.
The 20 day simple moving average (SMA) was turning lower but has since turned sideways and not given any sell signal.
The closing candlestick is bearish for Tuesday July 5
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels. These levels have not changed since January 2015.
2100 is still primary resistance and continues to keep the market advance well in check.
2090 is very light support.
2075 is also light support
Below that is 2050 which is light support.
2025 is better support than 2050 through to 2090.
2000 is primary support.
Weak support is at 1970 while stronger support is at 1956 and technically it is more important than 1970 for the market. 1940 is light support as is 1920. 1900 is more symbolic than anything else.
1870 is support. 1840 continues to be support. The 1820 level is light support. The strongest support level is at 1800.
1775 and 1750 are both critical support for the present bull market. While 1775 is important it is 1750 that is the bottom line.
A break of 1750 would mark a severe correction from the all-time high of 2134.72. This would be the biggest correction since the plunge in 2011 of a 20% pullback. A pullback to 1750 from the all-time high would be a drop of 384 points for a decline of 18%. A pull-back of that size would definitely stun investors and bring to question whether the bull market which started in 2009 is finished. From 1750 it is an easy slide to 1600 which was near the market top in 2007.
Stock Market Outlook Technical Signals
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and rising.
MACD Histogram: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9. MACD (Moving Averages Convergence / Divergence) issued a sell signal on June 14. On Friday July 1 MACD issued a weak buy signal. This signal needs to be confirmed.
Ultimate Oscillator: 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. The Ultimate Oscillator is positive and rising rapidly.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is negative and sideways although in general it is more neutral than anything else at present.
Slow Stochastic: 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. The Slow Stochastic has an up signal in place for Tuesday.
Fast Stochastic: For the Fast Stochastic I use the K period of 20 and D period of 5. These are not default settings but settings I set for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochastic also has an up signal in place for Tuesday.
Stock Market Outlook for Tomorrow – Jul 5 2016
For Tuesday stocks should dip in the morning and experience weakness to start. I am expecting a slightly negative close by the end of the day as stocks consolidate recent gains and await the next quarterly earnings season.
If stocks do move higher, it will be only by a small amount.
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