Day’s Summary
Thursday saw stocks plunge on the latest ADP report which came in at 497,000, more than double the expected 220,000. Meanwhile the Weekly Initial Unemployment Insurance Claims came in as expected at 248,000. Whether the ADP report was a warning or an error, investors immediately turned to selling and dumped shares in a broad-based sell-off. On the S&P, 88% of all trades were to the downside. The NASDAQ however saw 51% of all volume to the downside as the index held up better than the SPX.
The SPX closed down 35 points to 4411 and the NASDAQ closed down 112 points to 13,679.
Friday before the open, investors learn the June non-farm payroll numbers. On Friday these numbers will control market direction, at least in the morning. The technical indicators will play a longer term role and there were a number of important changes on Thursday.
Let’s review the technical indicators from the close on Thursday to see what we should expect for Friday’s market.
Stock Market Outlook: SPX Closing Chart For Thu Jul 6 2023
The index closed below the Upper Bollinger Band which is bearish and almost touched the 21 day moving average but is still above all major moving averages which is bullish.
The closing candlestick is bearish for Friday.
The 21, 50, 100 and 200 day moving averages are continuing to climb which is bullish. The Lower Bollinger Band is rising and pushing still higher above the 50 day moving average which is bearish. The Upper Bollinger Band is rising which is bullish. The SPX has entered a new Bollinger Bands Squeeze. At present the squeeze looks like it is signaling a lower move is coming although it is early in the squeeze to be certain of either direction.
Stock Market Outlook review of Thu Jul 6 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday Jul 3. On Thu Jul 6 2023 the index signaling down although it is unconfirmed.
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Ultimate Oscillator: The Ultimate Oscillator is falling and positive.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is overbought.
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Relative Strength Index: The RSI signal is falling and positive. It is leaving overbought.
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Rate of Change: The rate of change signal is falling.
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Stock Market Outlook: Support and Resistance Levels |
| 4450 is resistance |
| 4435 is resistance |
| 4420 is resistance |
| 4400 is strong resistance |
| 4390 is resistance |
| 4370 is resistance |
| 4350 is resistance |
| 4340 is resistance |
| 4325 is resistance |
| 4310 is resistance |
| 4300 is resistance |
| 4290 is resistance |
| 4275 is support |
| 4250 is support |
| 4240 is support |
| 4225 is support |
| 4210 is support |
| 4200 is good support |
| 4190 is support |
| 4180 is support |
Stock Market Outlook for Fri Jul 7 2023
For Friday the MACD technical indicator issued an unconfirmed down signal just a few days since an up signal on Monday this week. Other technical indicators are all signaling lower and the Relative Strength Index (RSI) is falling sharply, another signal that we could see some additional selling.
The morning will be influenced by the June unemployment report but if the numbers disappoint, expect to see some sharp selling. However any sign the labor market is softening will assist stocks initially. From there the technical indicators are showing the index will slip in the afternoon.
Potential Economic and Political Market Moving Events
Friday:
8:30 June non-farm payroll and unemployment rate
8:30 hourly wages including year over year