The Stock Market Outlook for Friday was for stocks to test the 2160 level but not break it. The outlook though was for weakness and a lower close. Instead the market drop on Thursday was bought into on Friday at the open and the day was spent with the index pushing higher right to the close.
S&P Index Close
The S&P index moved higher throughout the day and closed at an all-time high of 2175.03 for a gain on 9.86.
Dow Jones Index Close
The Dow followed the S&P higher as well, closing up 53.62 points to 18,570.85 .
NASDAQ Index Close
The NASDAQ moved higher as well, climbing 26.26 points for a half percent gain to close at 5100.16.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook -July 22 2016
Stock Market Outlook: Chart Comments:
The S&P has been pushing higher but on low volume and with constant weakness. The chart shows the index as moving more sideways than actually higher. The closing candlestick on Friday was neutral on the outlook for Monday. This is because the market closed at the high for the day but still continued to trend sideways rather than convincingly higher. This leads to a neutral outlook as often a day like Friday is followed by a weak day or even two.
The 20 day simple moving average (SMA) is continuing to rise as are the other major moving averages which indicates this is still an uptrending market.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels.
The S&P is trying to build support around the 2160 level.
2100 has become light support.
2090 is very light support.
2075 is also light support
Below that is 2050 which is light support.
2025 is better support than 2050 through to 2090.
2000 is primary support.
Weak support is at 1970 while stronger support is at 1956 and technically it is more important than 1970 for the market. 1940 is light support as is 1920. 1900 is more symbolic than anything else.
1870 is support. 1840 continues to be support. The 1820 level is light support. The strongest support level is at 1800.
1775 and 1750 are both critical support for the present bull market. While 1775 is important it is 1750 that is the bottom line.
A break of 1750 would mark a severe correction from the all-time high of 2134.72. This would be the biggest correction since the plunge in 2011 of a 20% pullback. A pullback to 1750 from the all-time high would be a drop of 384 points for a decline of 18%. A pull-back of that size would definitely stun investors and bring to question whether the bull market which started in 2009 is finished. From 1750 it is an easy slide to 1600 which was near the market top in 2007.
Stock Market Outlook Technical Signals
Momentum: For momentum I use a 10 period when studying market direction. Momentum is positive and falling.
MACD Histogram: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9. MACD (Moving Averages Convergence / Divergence) issued a buy signal on July 1. The buy signal was weaker on Friday.
Ultimate Oscillator: 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. The Ultimate Oscillator is positive and rising back into overbought readings.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive and moving sideways.
Slow Stochastic: 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. The Slow Stochastic is extremely overbought and has neutral signal in place for Monday.
Fast Stochastic: For the Fast Stochastic I use the K period of 20 and D period of 5. These are not default settings but settings I set for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochastic is extremely overbought but has an up signal in place for Monday.
Stock Market Outlook for Tomorrow – July 25 2016
For Monday the market is facing an extremely overbought environment. This does not mean stocks cannot advance.It does however mean that any advance may be given back quickly if a new catalyst to the downside should emerge.
The technical indicators are pointing to a choppy day for Monday with weakness caused by the overbought condition, but the bias is still up for the close even if only slightly.
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