Prior Trading Day Summary
On Thursday stocks continued to sell lower marking a 5th straight dat of selling on the SPX and 3 on the NASDAQ.
The S&P closed down 25 points to 6370 on 4.1 billion shares traded. 48% of the trading volume was being traded lower while 55% of stocks were falling by the close.
The NASDAQ closed down 72 points to 21,100 on 6.7 billion shares traded. 47% of volume was being traded lower and 53% of stocks were falling by the close.
For Friday, investors get the latest comments from Fed Chair Powell as he speaks from Jackson Hole.
Target earnings were good but the outlook was poor and with a change in CEO announced, the stock tumbled 6.3% for a drop of $6.67 by the close. This weighed on investors although the XRT – SPDR® S&P Retail ETF lost just half a percent.
Lets review the closing technical indicators from Thu Aug 21 2025 to see what they advise for Fri Aug 22 2025.
Stock Market Outlook: SPX Closing Chart For Thu Aug 21 2025
The index closed just below the 21 day moving average and below the Upper Bollinger Band. This is bearish.
The closing candlestick is bearish for Friday although the closing shadows indicate a bounce is still probable.
The 21 day moving average is rising and closed at 6380 which is bullish.
The 50 day moving average is rising and closed at 6260 which is bullish.
The 100 day moving average is rising and closed at 6099 which is bullish.
The 200 day moving average is rising and closed at 5920 which is bullish.
The Lower Bollinger Band is turning lower and appears finally ready to fall below the 50 day moving average. This will be negative for equities when it happens.
The Upper Bollinger Band is falling which is bearish. The index looks set to break below the 21 day moving average once more, on Friday.
The SPX chart is more bearish than bullish for Friday.
SPX Stock Market Outlook review of Thu Aug 21 2025
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tue Aug 19 2025. On Thu Aug 21 2025 the down signal was cstronger.
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Ultimate Oscillator: The Ultimate Oscillator is falling signaling a bounce is unlikely.
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Slow Stochastic: The Slow Stochastic has a down signal in place. It could dip lower today.
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Relative Strength Index: The RSI signal is falling.
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| Rate of Change: The rate of change signal is falling, signaling a lower close for Friday is likely. 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. |
Stock Market Outlook: Support and Resistance Levels |
| 6470 is resistance |
| 6450 is resistance |
| 6425 is resistance |
| 6400 is resistance |
| 6390 is resistance |
| 6365 is resistance |
| 6350 is resistance |
| 6325 is resistance |
| 6300 is resistance |
| 6250 is resistance |
| 6225 is resistance |
| 6200 is resistance |
| 6175 is support |
| 6150 is support |
| 6125 is support |
| 6100 is support |
| 6075 is support |
| 6050 is support |
| 6025 is support |
| 6000 is support |
Stock Market Outlook for Fri Aug 22 2025
For Friday investors will be focused on comments from Fed chair Powell regarding inflation and the economy. He speaks from the Jackson Hole conference. I don’t expect anything new and I do not expect he will express any support for an interest rate cut in September. However, even with a non-committal in his comments, investors could still react which is why I put together a SPY ETF trade on Thursday to try to profit from his comments today.
Technically the outlook still looks negative for stocks but the past 5 trading days, while negative, have not seen heavy selling. Instead a lot of the selling appears more like profit-taking at a market high, rather than any concerns from investors.
For Friday stocks could still attempt a bounce although the technical indicators are becoming stronger with their signals to the downside. On Thursday the Weekly Initial Unemployment Insurance Claims came in higher than expected which many economists believe the Fed may react to with a dip in interest rates.
Potential Economic and Political Market Moving Events
Monday:
10:00 Home Builder Confidence was lower than estimated, coming in at 32
Tuesday:
8:30 Housing starts were well beyond estimates at 1.43 million
8:30 Building Permits were lower than estimates at 1.35 million
Wednesday:
2:00 Minutes of July FOMC meeting are not expected to move the markets
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims rose higher than estimated to 235,000
8:30 Philadelphia Fed manufacturing survey fell more than expected to -0.3
9:45 S&P flash services PMI did not dip as much as expected, ending up at 55.4 from 55.7 prior
9:45 S&P flash manufacturing PMI came in stronger than expected at 53.3 versus 49.8 prior
10:00 Existing home sales beat all estimates, rising to 4.01 billion for July.
10:00 Leading economic indicators came in at -0.1%, as estimated.