Stock Market Outlook for Fri Jul 1 2022 – Weakness and Lower

Stock Market Outlook Weakness and Lower

Inflation data on Thursday failed to show inflation was peaking. At the same time, it did not show that inflation was “raging ahead” either. Still, investors at the outset of trading decided to sell on the inflation data and the open saw the index collapse to 3740 by 10:00 AM. That though ended up being the low as buyers stepped back in and by 12:30 the S&P had recovered to Wednesday’s close of 3818. The final two hours of trading saw sellers return but on lower volume. The close was lower by 33 points with the S&P at 3785.

The NASDAQ lost 149 points to close at 11,028.

With Monday the July 4th holiday, let’s review Thursday’s close to see what to expect for Friday ahead of a shortened week next week.

Stock Market Outlook Chart Comments At The Close on Thu Jun 30 2022 

On Thursday the closing candlestick is bearish and points to a lower day on Friday.

The Upper Bollinger Band fell below the 200 day moving average which is another down signal for the index.

All the moving averages are falling.

The Lower Bollinger Band is still falling which is bearish.

There are no bullish signals for Friday.

There are 4 down signals still in place and there have been no up signals since the start of April.

The chart is 95% bearish for Friday. A close down at 3740 is likely.

Stock Market Outlook review of Thu Jun 30 2022

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling and negative.

  • 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 lost strength and the MACD histogram also lost strength.

  • 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 down 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 falling.

  • 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.

  • 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 resistance

4000 is strong resistance

3975 is light resistance and is a decline of 17.5%

3900 is light resistance and is a decline of 19%

3850 is light resistance and is a decline of 20%

3825 is light support

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 Jul 1 2022 

For Friday the technical indicators are all bearish. Even MACD is losing the up signal. With so many signals bearish, it would not be unusual for a bounce attempt especially as the first day of July historically has been higher 87% of the time over the past 32 years.

However the technical indicators are pointing lower for the index and the Upper Bollinger Band falling below the 200 day is quite bearish.

Friday will continue the weakness we have seen and end with a lower close, perhaps down to 3740.

Potential Market Moving Events

For the final week of June the biggest events are on Thursday when inflation reports are released. Any indication of even a slight slowing of inflation will see stocks rise. Any rise in inflation will send stocks lower.


8:30 PCE Inflation (monthly) was 0.6%

8:30 Core PCE Inflation (monthly) was 0.3% slightly below estimates of 0.4%

8:30 PCE Inflation year-over-year was 6.3% in-line with estimates

8:30 Core PCE Inflation year-over-year was 4.7% which was below estimates of 4.8%

8:30 Real disposable income was -0.1%

8:30 Real consumer spending was -0.4%

8:30 Weekly Initial Unemployment Insurance Claims was 231,000 in-line with estimates

9:45 Chicago PMI was 56.0 below estimates of 58.0


10:00 ISM manufacturing index

10:00 Construction Spending

Stock Market Outlook Archives

Stock Market Outlook - Slightly Lower
On Thursday the day started strong with the SPX pushing to just above 4255 by mid-morning building on Wednesday’s monster rally. That brought in sellers ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members the morning Investing Strategy Notes for Thu Aug 11 2022 cover a variety of topics including a look at Walt Disney Stock ....... Read More
Stock Market Outlook Higher Still
On Wednesday all the “bad news” from the past several days was forgotten. Investors focused on the inflation report which they felt showed inflation is ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members the morning Investing Strategy Notes for Wed Aug 10 2022 cover a variety of topics. There are also a number of trades ....... Read More
Stock Market Outlook waiting on report
More bad news from chip makers dominated markets on Tuesday but investors still held above the 4100 level in the SPX. The day ended with ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members the morning Investing Strategy Notes for Tue Aug 9 2022 cover a variety of topics. There are also a number of trades ....... Read More
Stock Market Outlook - Dips Likely - Lower CLose
Monday saw the S&P open and push higher but by 11:00 the rally was over and the index spent the rest of the day falling. ....... Read More
Morning Investing Strategy Notes
For FullyInformed Members the morning Investing Strategy Notes for Mon Aug 8 2022 cover a variety of topics. They also look at trades in Berkshire ....... Read More