Thursday saw some swings in the SPX but the close was neutral with the SPX losing just 3 points to close at 4152 virtually unchanged from Wednesday’s close.
The NASDAQ though climbed 52 points on fairly heavy volume of 5.6 billion with 66% of that volume traded to the upside. The day ended at 12720.
On Friday the morning at least will be all about the July unemployment report but the technical indicators will still have some say for the afternoon.
Let’s review the closing technical indicators from Thursday to see what to expect for Friday.
Stock Market Outlook Chart Comments At The Close on Thu Aug 4 2022
The closing candlestick is neutral for Friday which is to be expected as investors wait for the unemployment report Friday morning at 8:30. It closed above the 100 day moving average and just below the 200 day for a second day. This is bullish.
The 21 day moving average is still rising and is above the 50 day for a third day. The 50 day moving average is also turning higher. This is bullish.
The first up signal since April which was released yesterday erased the May 16 down signal.
The Upper Bollinger Band is rising and above the 200 day moving average which is bullish.
The Lower Bollinger Band is trending sideways which is bullish.
The 200 and 100 day moving average are still falling which is bearish.
There are 3 down signals still in place and one new up signal.
The chart is 80% bullish for Friday.
Stock Market Outlook review of Thu Aug 4 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday June 27. On Thursday the up signal was still strong. The histogram is also strong. The signals are bullish.
- 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 falling.
- 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 neutral signal in place and is overbought.
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 unchanged and into overbought readings.
- 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.
- 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:
4200 is light resistance
4150 is light resistance
4100 is light resistance
4050 is light resistance
4025 is light support
4000 is light support
3975 is light support and is a decline of 17.5%
3900 is light support and is a decline of 19%
3850 is light support and is a decline of 20%
3825 is light resistance.
3800 is good support.
3775 is light support
3750 is light support
3730 is light support
3700 is good support
3675 is light support
3650 is light support
3625 is light support
3600 is good support and is a decline of 25%
Stock Market Outlook for Tomorrow – Fri Aug 5 2022
For Friday the S&P chart is 80% bullish, the same as it was for Thursday. The technical indicators are still mixed ahead of the July unemployment report. This is more bullish than bearish and even a slight dip in the morning on Friday may not last long.
Overall the signals are still more bullish than bearish. That means the unemployment report can easily have a slight miss and it shouldn’t affect the overall bullish direction. A large surprise though could send the index lower. I am not expecting that will be the case.
The morning market direction will be determined by the July unemployment report but the afternoon looks more bullish from a technical perspective.
Potential Market Moving Events
The biggest market moving event this week today at 8:30 when we get the July unemployment numbers.
Thursday: There were no surprises on Thursday.
8:30 Weekly Initial Unemployment Insurance Claims expected to be 260,000 and came in at 260,000.
8:30 Continuing jobless claims rose to 1.42 million from 1.37 million
8:30 Trade deficit is expected to be negative $80.0 billion. It came in at -79.6 billion (negative) almost in-line with forecasts.
Stock Market Outlook Archives
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