Prior Trading Day Summary
On Friday stocks tumbled on the back of lower than expected employment numbers and uncertainty over the effects of tariffs being implemented world-wide as of August 1.
The July non-farm payroll came in at 73,000 jobs created, well below estimates of 100,000. However prior months were revised lower with employment numbers reduced dramatically by 258,000 which now makes the two prior months on par with covid job losses. The revisions were unexpected and stunned investors. This resulted in President Trump firing the labor statistic chief.
The indexes closed lower on Friday with the SPX losing 101 points to close at 6238 and the NASDAQ losing 472 points and closing at 20650.
Over the past several days the technical indicators, in particular the MACD technical indicator, were warning that stocks might slip. Friday proved those predictions as correct.
Lets review the closing technical indicators from Fri Aug 1 2025 to see what they predict for the start of the first week of August.
Stock Market Outlook: SPX Closing Chart For Fri Aug 1 2025
The index closed below the Upper Bollinger Band and below the 21 days moving average. Both are bearish signals.
The closing candlestick is bearish but also shows a long shadow, indicating a good chance we could see a bounce on Monday.
The 21 day moving average stalled on Friday and closed unchanged at 6301 which is bearish.
The 50 day moving average is rising and closed at 6138 which is bullish.
The 100 day moving average is rising and closed at 6002 which is bullish.
The 200 day moving average is rising and closed at 5850 which is bullish.
The Lower Bollinger Band is turning sideways which is negative but it is above the 50 day moving average. The Upper Bollinger Band is dipping lower. The outlook for stocks moving out of the Bollinger Bands Squeeze is lower.
The SPX chart is seeing more bearish signals to start trading on Monday.
SPX Stock Market Outlook review of Fri Aug 1 2025
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and negative.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tue Jul 15. On Fri Aug 1 2025 the down signal gained strength.
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Ultimate Oscillator: The Ultimate Oscillator is falling.
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Slow Stochastic: The Slow Stochastic has a down signal in place.
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Relative Strength Index: The RSI signal is falling but signaling oversold.
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| Rate of Change: The rate of change signal is falling, signaling a lower close for Monday. 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. |
Stock Market Outlook: Support and Resistance Levels |
| 6400 is resistance |
| 6390 is resistance |
| 6365 is resistance |
| 6350 is resistance |
| 6325 is resistance |
| 6300 is resistance |
| 6250 is resistance |
| 6225 is resistance |
| 6200 is resistance |
| 6175 is resistance |
| 6150 is resistance |
| 6125 is resistance |
| 6100 is support |
| 6075 is support |
| 6050 is support |
| 6025 is support |
| 6000 is support |
| 5990 is support |
| 5975 is support |
| 5950 is support |
| 5925 is support |
| 5900 is support |
Stock Market Outlook for Mon Aug 4 2025
The technical indicators all turned lower by the close on Friday thanks to the sell-off. A few are nearing oversold readings while the Relative Strength Index (RSI) is flashing oversold. For this reason a bounce is likely.
The day on Monday should start with a higher open and possibly a bounce. From there I am expecting stocks to trend sideways but keep a bearish bias. The close is still expected to be lower on Monday.
Potential Economic and Political Market Moving Events
Monday:
10:00 Factory orders are estimated to fall to -4.9% from 8.2% prior