Stock Market Outlook for Mon Aug 5 2024 – Bounce Possible But Lower Close

Prior Trading Day Summary:

On Friday stocks started the day with a plunge following lower than expected jobs growth in July. The unemployment rate rose to 4.3% and only 114,000 jobs were created, far below estimates of 175,000 to 189,000. Analysts warned Friday morning that the Fed’s “late to the party” interest rate cut which is being held off until September at the earliest will probably be a case of too late. A recession was predicted by many analysts. If the economy does enter a recession, equity prices will reset and that means lower prices for most equities. The selling was steady throughout the day with any bounce attempts quickly sold into.

The SPX closed down 100 points on 5.2 billion shares trade to end the day at 5346. 70% of al stocks were falling, the highest percentage of stocks since July 24 when the SPX lost 128 points. The S&P is now down 5.7% from its 52 week high made on July 16 of 5669.

The NASDAQ slipped into a correction as it closed down 418 points on 6.9 billion shares traded to end the day at 16,776. 77% of all stocks were falling and there were 332 new 52 week lows, the highest number of new lows since the first two weeks of April. Friday marked a drop of 10.15% for the NASDAQ since its all-time high of 18,647 on July 10.

Let’s review the closing technical indicators from Fri Aug 2 2024 to see what the signals advise to expect on Mon Aug 5 2024.

Stock Market Outlook: SPX Closing Chart For Fri Aug 2 2024

The index touched the 100 day moving average in Friday’s carnage before closing back above it. This is bearish.

The closing candlestick has a long shadow which indicates a potential bounce to start the day on Monday but a retest of the 100 day and a break of it is likely.

The 21 day moving average is falling which is bearish.

The 50 day moving average is slowing its climb which is bearish.

The 200 day moving average is still climbing. The 200 day is at 5069 which is bullish and the 100 day is also climbing to 5306. Both the 100 and 200 day moving averages are seeing their rise slowing considerably. This is bearish.

The Lower Bollinger Band is below the 50 day moving average and falling which is bearish. The Upper Bollinger Band is turning higher which holds out some hope for a bounce back but a turn lower for the Upper Bollinger Band this week is likely.

The S&P chart is bearish with only the closing candlestick offering a chance for a bounce.

SPX Stock Market Outlook review of Fri Aug 2 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Mon Aug 5 2024 

For Monday more selling should be expected. A bounce is possible but all the technical indicators are warning that stocks are heading lower before any meaningful bounce might occur. That means any bounce on Monday should be used to trim positions and take profits. This is another busy week for stocks but last week too many stocks disappointed investors which also resulted in selling. This week we could see a similar result with too many stocks not beating estimates and gaining, year-over-year. Monday will lower.

Potential Economic and Political Market Moving Events

Monday:

9:45 Final services PMI

10:00 ISM services