Thursday saw another day of weakness with the S&P intraday reached 4340 before bouncing to close at 4360, down just 14 points. The weakness looks set to continue into Friday although there are signals that market may try to bounce.
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 Jul 15 2021
The S&P closed below the Upper Bollinger Band again on Thursday. The Lower Bollinger Band is turning sideways which is bearish. The rise in the Upper Bollinger Band is stalling which is also bearish.
The closing candlestick on Thursday is bearish for Friday.
All the major moving averages are climbing. The chart is still bullish but there are more bearish signs for Friday that we saw at the beginning of the week.
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 Friday June 25. That up signal lost strength again on Thursday.
- 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.
- 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 in place and is signaling 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 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:
4400 is resistance
4370 is resistance
4350 is resistance
4300 is light support
4290 is light support
4270 is light support
4250 is light support
4225 is light support
4200 is light support
4175 is light support
4150 is light support
4100 is good support
4070 is light support
4050 is light support
4000 is good support
3900 is support
3850 is support
3800 is support
3750 is good support
3700 is light support
3680 is light support
3600 is strong support
Stock Market Outlook for Tomorrow – Fri Jul 16 2021
For Friday there are primarily bearish signals in the technical tools and often that means a bounce can’t be far behind.
Despite this, Friday looks like a bounce may happen at the open but then weakness will settle in and the day will end slightly lower.
Monday may see a better attempt to move back to the market highs.