Friday was all about the June jobs numbers. The numbers came in strong enough to persuade many analysts and investors that the Fed may hold off on any interest rate cut until September. The odds of an interest rate cut in July fell from 80% before the June unemployment report to 20% after its release. The report sent stocks falling at the open on Monday and many investors rushed to the exit. It was a mistake. By the close all three indexes had just slight losses. The S&P closed down just 5 points.
Stock Market Outlook Chart Comments At The Close on Fri Jul 5 2019
The index closed at the Upper Bollinger Band and above all the major moving averages. The closing candlestick was bearish for Monday. The Bollinger Bands still look like they may form into a Bollinger Bands Squeeze sometime next week but with both the Upper Bollinger Band and Lower Bollinger Band rising, we may not get a squeeze. At present the Bollinger Bands are bullish.
The buy signal from June 28 with the 21 day moving above the 50 day, is still gaining strength.
The 200 day moving average is now above the 2800 level which is bullish.
The chart is very bullish aside from the bearish candlestick for Monday.
Stock Market Outlook review of July 5 2019
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive and falling.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thursday June 6. The up signal was strong on Friday.
- 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 signal is positive and still rising but turned sideways on Friday.
- 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 signal has an up signal in place and is 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 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 back which indicates indecision 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.
Support and Resistance Levels To Be Aware Of:
3000 is resistance
2950 is light support
2900 is light support
2860 is better support
2830 is light support
2800 is strong support
2795 is light support
2745 to 2750 is light support
2725 is light support
2700 is light support
2675 is light support
2650 is support
2625 is light support
2600 is support.
There was good support at the 2550 level which is back to being support.
The 2500 level is support.
The S&P has light support at 2480 and better support at 2450.
There is good support at 2425.
Below that there is some support at 2400, 2380, 2350.
Stock Market Outlook for Tomorrow – Mon Jul 8 2019
For Monday the S&P chart is quite bullish aside from the bearish candlestick.
The technical indicators are all quite strong but most are dipping or falling back slightly.
All of this points to weakness to start the day on Monday. However the technical signals are still strong so weakness will be an opportunity to place more trades.
While the morning will see weakness and dips, the afternoon will see the S&P climb back and close positive on the day. This should setup Tuesday for further advances.
The biggest problem mid-week will be testimony from Fed Chair Powell to Congress. He has a reputation of saying the “wrong things” which sends stocks lower. If that happens, I will be looking for more trade opportunities as any deeper than expected dips due to testimony from Powell, will prove to be an opportunity to earn more profits as I am expecting a rebound should there be any dip mid-week.
Stock Market Outlook Archives
Stock Market Outlook for Wed May 1 2024 – Bounce But Lower – Fed Interest Rate Decision
Morning Investing Strategy Notes for Tue Apr 30 2024
Stock Market Outlook for Tue Apr 30 2024 – Dips Likely – Flat To Higher Close
Morning Investing Strategy Notes for Mon Apr 29 2024
Stock Market Outlook for Mon Apr 29 2024 – Some Weakness But Higher
Morning Investing Strategy Notes for Fri Apr 26 2024
Stock Market Outlook for Fri Apr 26 2024 – Higher and Positive Close
Morning Investing Strategy Notes for Thu Apr 25 2024
Stock Market Outlook for Thu Apr 25 2024 – Weakness and Lower
Morning Investing Strategy Notes for Wed Apr 24 2024
Stock Market Outlook for Wed Apr 24 2024 – Some Weakness But Higher Close
Morning Investing Strategy Notes for Tue Apr 23 2024
Stock Market Outlook for Tue Apr 23 2024 – Bounce But Lower
Morning Investing Strategy Notes for Mon Apr 22 2024
Stock Market Outlook for Mon Apr 22 2024 – No Change – Deeply Oversold Bounce Possible
