Wednesday saw the S&P open above Tuesday’s close and by 10:30 begin a climb to close just below the day’s high. The SPX closed up 64 points to 4155 reestablishing the rally and recovering the losses of the prior two days of negative closes.
The NASDAQ had a monster day climbing 319 points to end the day at 12,668.
Let’s review the closing technical indicators from Wednesday to see what to expect for Thu Aug 4 2022. Friday we get the July unemployment report.
Stock Market Outlook Chart Comments At The Close on Wed Aug 3 2022
The closing candlestick is bullish for Thursday. It closed above the 100 day moving average and just below the 200 day. Intraday the index brushed against the 200 day moving average. This is bullish.
The 21 day moving average is still rising and is above the 50 day for a second day. The 50 day moving average is also turning higher. This is bullish.
The first up signal since April erases the May 16 down signal.
The Upper Bollinger Band is rising and is nearing the 200 day moving average which is bullish.
The Lower Bollinger Band is trending sideways which is bullish.
The 200 and 100 day moving average are still falling which is bearish.
There are 3 down signals still in place and one new up signal.
The chart is 80% bullish for Thursday.
Stock Market Outlook review of Wed Aug 3 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is rising and positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Monday June 27. On Wednesday the up signal gained strength. The histogram is also gained strength. The signals are bullish.
- 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 is falling.
- 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 has a down 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 rising and into overbought readings.
- 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 rising.
- 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:
4200 is light resistance
4150 is light resistance
4100 is light resistance
4050 is light resistance
4025 is light support
4000 is light support
3975 is light support and is a decline of 17.5%
3900 is light support and is a decline of 19%
3850 is light support and is a decline of 20%
3825 is light resistance.
3800 is good support.
3775 is light support
3750 is light support
3730 is light support
3700 is good support
3675 is light support
3650 is light support
3625 is light support
3600 is good support and is a decline of 25%
Stock Market Outlook for Tomorrow – Thu Aug 4 2022
For Thursday the S&P chart is 80% bullish. The technical indicators are mixed which is perfect for the index to continue to push higher. It would be more concerning if the technical indicators were all pointing higher and/or overbought. Instead they are split with some still pointing lower and others higher. This is a perfect backdrop for the index to move higher. As well often the index closes higher the day before the monthly unemployment report, which is Friday.
The morning would appear to be the weaker part of the day on Thursday, certainly the first hour. Any weakness though is an opportunity to set up trades. The close will be higher ahead of Friday’s July Non-Farm Payroll Report.
Potential Market Moving Events
The biggest market moving event this week is on Friday morning at 8:30 when we get the July unemployment numbers. I will be putting together a SPY ETF trade ahead of those numbers being released.
Wednesday:
10:00 Factory orders – expected to slip to 1.2%. Instead factory orders rose 2% which some analysts construed as inflationary while others believe it shows no recession likely.
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims expected to be 260,000
8:30 Continuing jobless claims
8:30 Trade deficit is expected to be negative $80.0 billion.
Stock Market Outlook Archives
Stock Market Outlook For Wed May 6 2026 – Choppy But Higher Still
Morning Investing Strategy Notes for Tue May 5 2026
Stock Market Outlook For Tue May 5 2026 – Overbought and Lower
Morning Investing Strategy Notes for Mon May 4 2026
Stock Market Outlook For Mon May 4 2026 – Dips Likely With Possible Lower Close
Morning Investing Strategy Notes for Fri May 1 2026
Stock Market Outlook For Fri May 1 2026 – Overbought But Higher
Morning Investing Strategy Notes for Thu Apr 30 2026
Stock Market Outlook For Thu Apr 30 2026 – Dips Likely Possible Lower Close
Morning Investing Strategy Notes for Wed Apr 29 2026
Stock Market Outlook For Wed Apr 29 2026 – Choppy But Higher Ahead Of More Earnings
Morning Investing Strategy Notes for Tue Apr 28 2026
