Thursday saw a dip early morning in the SPX below 4000. Buyers stepped in and the index rose to close at 4072 as the Fed rally from Wednesday continued.
The SPX added another 1.2% on Thursday to close up 48.82.
The NASDAQ rose 130 points for a 1% gain. It closed at 12162.59, now up 5% in two days.
Let’s review the closing technical indicators from Thursday to see what to expect for Fri Jul 29 2022, the final trading day for July.
Stock Market Outlook Chart Comments At The Close on Thu Jul 28 2022
The closing candlestick is bullish for Friday. It reached the 100 day moving average on Thursday. This is bullish.
The 21 day moving average is rising which is bullish and could move above the 50 day early next week. That would be the first major up signal, if it occurs.
The Upper Bollinger Band is rising and is nearing the 100 day moving average which is bullish.
The Lower Bollinger Band is falling which could indicate the Bollinger Bands Squeeze will end shortly. This 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 65% bullish for Friday.
Stock Market Outlook review of Thu Jul 28 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising sharply 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 strengthened. The histogram also improved. Both are bullish signals.
- 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 unchanged.
- 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 am up 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 rising and overbought.
- 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 rising.
- 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 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 Jul 29 2022
For Friday the technical indicators are gaining strength and are pointing to another higher day on Friday. The closing candlestick on Thursday is bullish but there was also a long shadow (tail) which often signals a dip before the market moves higher on Friday.
The rally will continue on Friday with the technical indicators gaining more strength. The 21 day is close to moving above the 50 day which would be the first major up signal since the start of April.
For Friday investors should expect a dip but buyers will push back and take advantage of any dip, especially if deeper than expected. The close will still be higher.
Potential Market Moving Events
Friday gives us more data for inflation.
Thursday:
8:30 Gross domestic product for Q2 came in at negative 0.9% marking a second quarter of negative growth.
8:30 Weekly Initial Unemployment Insurance Claims were expected to be 249,000. They came in slight higher at 256,000.
Friday:
8:30 PCE inflation index and Core PCE price index
8:30 Real disposable income
8:30 Real consumer spending
9:45 Chicago PMI
10:00 Univ of Michigan consumer sentiment index
Stock Market Outlook Archives
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Morning Investing Strategy Notes for Wed May 22 2024
Stock Market Outlook for Wed May 22 2024 – Choppy Primarily Sideways Ahead of NVIDIA Earnings
Morning Investing Strategy Notes for Tue May 21 2024
Stock Market Outlook for Tue May 21 2024 – Still Choppy But Higher
Morning Investing Strategy Notes for Mon May 20 2024
Stock Market Outlook for Mon May 20 2024 – Choppy, Dip Possible But Still Up
Morning Investing Strategy Notes for Fri May 17 2024
Stock Market Outlook for Fri May 17 2024 – Overbought – Choppy Bias Lower
Morning Investing Strategy Notes for Thu May 16 2024
Stock Market Outlook for Thu May 16 2024 – Choppy But Higher
Morning Investing Strategy Notes for Wed May 15 2024
Stock Market Outlook for Wed May 15 2024 – CPI Numbers – Choppy – Dips Likely But Higher
Morning Investing Strategy Notes for Tue May 14 2024
Stock Market Outlook for Tue May 14 2024 – All About The PPI Numbers – Mixed Outlook
