Stock Market Outlook for Fri Jul 9 2021 – Bounce Likely

Thursday saw a sell-off with the S&P falling to the 21 day moving average before rebounding to close down 37 points, ending the day at 4320.

Let’s review Thursday’s technical indicators to see what they predict for Friday.

Stock Market Outlook Chart Comments At The Close on Thu Jul 8 2021 

The S&P closed below the Upper Bollinger Band. The Lower Bollinger Band continued to fall on Thursday which is bullish.

The closing candlestick on Thursday is bearish for Friday but also is indicating a bounce is likely.

The 50 day moving average is turning a bit lower by the close on Thursday but the 21, 100 and 200 day moving averages are still climbing.

Stock Market Outlook review of Jul 8 2021

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is falling and positive. It is signaling we should expect further weakness on Friday.

• 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 some strength on Thursday but is still bullish.

• 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 falling and 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 a down signal in place for Friday and is signaling extremely 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 and no longer signaling 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 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:

4350 is resistance

4300 is resistance

4290 is resistance

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 9 2021 

For Friday the S&P has a good chance to see a bounce in the morning following Thursday’s sell-off but the technical indicators are still advising there is more downside still ahead.

That could mean a bounce Friday but then a flat to a lower close.

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