Stock Market Outlook for Fri Jul 23 2021 – Morning Weakness Possible But Higher Close

On Thursday markets managed to squeeze a bit more out of the rally. The S&P closed up 8 points to end the day at 4367. The NASDAQ rose 52 points to end the day at 14,684.

Let’s review the technical indicators at the close on Thursday to see how the week will end.

Stock Market Outlook Chart Comments At The Close on Thu Jul 22 2021 

The S&P closed above the 21 day moving average again on Thursday. This left a bullish candlestick for Friday.

The Upper Bollinger Band is now turned sideways while the Lower Bollinger Band is swinging higher and is ready to move above the 50 day moving average. A Bollinger Bands Squeeze is underway which could swing the market either way. At present the outlook is bearish to neutral for the outcome.

All the major moving averages are still climbing which is bullish. On Friday the morning may see weakness according to the closing candlestick but should still end flat to slightly higher.

Stock Market Outlook review of Thu Jul 22 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is rising and back positive.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Friday July 16. On Thursday the down signal was weaker again.

• 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 still has an up signal in place.

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.

• 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 which normally means we shouldn’t expect to see prices climb dramatically higher on Friday.

• 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 23 2021 

The technical indicators have not changed from Wednesday’s close, on Thursday. That means the outlook is still unchanged. There should be some weakness on Friday, particularly in the morning. The close should be flat to slightly higher, ending what has been a volatile week starting with the plunge on Monday. Friday should be relatively slow.

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