Thursday saw the S&P pushing higher, gaining 39 points and closing within a point of 4000, the highest close since June 9.
The NASDAQ rose 162 points to end the day at 12,059, back above 12,000. On Wednesday the market was entering overbought readings. By the close on Thursday, there were more overbought signals.
Let’s review the closing technical indicators from Thursday to see what to expect for Fri Jul 22 2022.
Stock Market Outlook Chart Comments At The Close on Thu Jul 21 2022
The closing candlestick is still bullish for Froiday and closed above the 50 day moving average for the third day. It also closed above the Upper Bollinger Band which is also a bullish signal. The closing candlestick does indicate the rally is slowing, seen by the long shadow (tail) on the day’s closing candlestick.
The 21 day moving average is continuing climbing which is bullish.
The Upper Bollinger Band is rising and is above the 50 day moving average which is bullish.
The Lower Bollinger Band turned sideways by the close, indicating the rally is slowing. The Bollinger Bands Squeeze appears to be pushing for higher stock prices, which is bullish.
All the moving averages are falling except the 21 day.
There are 4 down signals still in place and there have been no up signals since the start of April.
The chart is 55% bullish for Friday for a third day.
The next goal for the index is to retake 4000. The ultimate goal of any rally at present is closing and holding above 4100 but that may be beyond this rally. We will soon know, but for Friday the chart is biased toward the bulls although the closing candlestick and the Lower Bollinger Band are a concern.
Stock Market Outlook review of Thu Jul 21 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 gained strength and the histogram continued improving.
- 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. It is signaling overbought.
- 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 an up signal in place for Friday and 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 rising and positive. It is 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 falling and positive.
- 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 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 Jul 22 2022
For Friday the technical indicators are more mixed than they were for the past two days. There are more overbought signals and there are a number of technical indicators already changing direction. Couple those with the closing candlestick and the change in trend by the Lower Bollinger Band and we have a choppy day ahead for Friday to end the week.
With overbought signals dips are likely but there is still a chance the SPX will close higher on Friday. If it closes lower, it does not signal the end of the rally.
Potential Market Moving Events
This is a quieter week so the main focus will be on earnings.
Friday:
9:45 S&P global US manufacturing PMI which is estimated to be 52.2
9:45 S&P global US services PMI which is estimated to be 53.0
Stock Market Outlook Archives
Stock Market Outlook For Wed May 6 2026 – Choppy But Higher Still
Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
