Day’s Summary
On Wednesday, the confirmation of last Thursday’s down signal, was proved correct as stocks pulled back from their most recent overbought rally. The spark for the pullback was a downgrade of US credit rating by Fitch which caught investors by surprise. Despite many analysts speaking out on Wednesday and advising they did not see any reason for the downgrade, investors were nervous on Wednesday and took profits. Selling was not brisk but instead it was steady. Toward the end of the day the SPX reached 4505 before a final small rebound managed to close the SPX at 4513.
The NASDAQ saw 5.6 billion shares traded in a slight rise in daily volume. The index closed down 310 points for a 2.1% decline and a close at 13,973, back below 14000.
Let’s review the technical indicators from the close on Wednesday to see what to expect for Thursday’s trading.
Stock Market Outlook: SPX Closing Chart For Wed Aug 2 2023
The index closed at the 21 day moving average. This is well below the Upper Bollinger Band and is bearish.
The closing candlestick on Wednesday is bearish for Thursday.
The 21, 50, 100 and 200 day moving averages are continuing to climb which is bullish.
The Lower Bollinger Band fell back to the 50 day moving average which is bearish. The Upper Bollinger Band is still rising which is bullish.
Overall the index is still bullish but showing signs of falling lower for the next few days before resuming the rally.
Stock Market Outlook review of Wed Aug 2 2023
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 Thursday Jul 27. On Thursday the down signal will continue.
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Ultimate Oscillator: The Ultimate Oscillator is falling and negative.
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Slow Stochastic: The Slow Stochastic has a weak up signal in place. It is overbought.
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Relative Strength Index: The RSI signal is falling.
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Rate of Change: The rate of change signal is falling.
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Stock Market Outlook: Support and Resistance Levels |
| 4600 is resistance |
| 4575 is resistance |
| 4550 is resistance |
| 4525 is resistance |
| 4500 is resistance |
| 4485 is resistance |
| 4470 is resistance |
| 4450 is support |
| 4435 is support |
| 4420 is support |
| 4400 is support |
| 4390 is support |
| 4370 is support |
| 4350 is support |
| 4340 is support |
| 4325 is support |
| 4310 is support |
| 4300 is support |
| 4290 is support |
| 4275 is support |
| 4250 is support |
| 4240 is support |
| 4225 is support |
| 4210 is support |
| 4200 is good support |
Stock Market Outlook for Thu Aug 3 2023
For Thursday the S&P technical indicators are once again biased lower. There will be bounces but it will take several days for the index to shake off the selling, following Wednesday’s down day.
Investors should expect two bounce attempts on Thursday but earnings on Wednesday after the close in many stocks were not as strong as expected.
Potential Economic and Political Market Moving Events
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims
9:45 S&P final US services PMI
10:00 ISM services
10:00 Factory orders