Wednesday saw the rally begin to lose steam as the index tried to push beyond 3975. In the end the SPX was unable to break through and ended the day up 23 points at 3959.
The NASDAQ rose 184 points to end the day at 11,897.
Let’s review the closing technical indicators from Wednesday to see what to expect for Thu Jul 21 2022.
Stock Market Outlook Chart Comments At The Close on Wed Jul 20 2022
The closing candlestick is still bullish for Thursday and closed above the 50 day moving average for the second day. It also closed above the Upper Bollinger Band which is also a bullish signal. It does though indicate that the rally is slowing. This means there are more chances the index could dip a number of times on Thursday.
The 21 day moving average is continuing climbing which is bullish.
The Upper Bollinger Band is turning up and is above the 50 day moving average which is bullish.
The Lower Bollinger Band is turning higher which is also bullish. The Bollinger Bands Squeeze appears to be pushing for higher stock prices, which is bullish.
All the moving averages are falling except the 21 day.
There are 4 down signals still in place and there have been no up signals since the start of April.
The chart is 55% bullish for Thursday for a second day.
The next goal for the index is to retake 3975. The ultimate goal of any rally at present is closing and holding above 4100 but that may be beyond this rally. We will soon know, but for Thursday the chart is biased toward the bulls.
Stock Market Outlook review of Wed Jul 20 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 and the histogram continued improving.
- 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 rising. It is nearing overbought.
- 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 an up signal in place for Thursday and nearing 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 positive. It is 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 and positive.
- 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 resistance
4000 is strong resistance
3975 is light resistance and is a decline of 17.5%
3900 is light resistance and is a decline of 19%
3850 is light resistance 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 Jul 21 2022
For a second straight day there are no bearish signals from the technical indicators. They do though point to the rally as becoming overbought and that means dips are more likely on Thursday.
For now though, dips remain opportunities to setup trades as the bias is still higher for the SPX.
Tesla earnings after hours on Wednesday may push stocks either up or down. The earnings were better than expected but revenue missed estimates. There were also signs of supply problems, currency fluctuations and markets like China, slowing. Overall the stock probably has a better chance to slip than to rally.
There is still room to the upside before more technical indicators show very overbought. For Thursday the rally looks to be losing some steam and that means it is slowing and into overbought signals. That means there is a possible negative close on Thursday although a higher close is still expected.
Potential Market Moving Events
This is a quieter week so the main focus will be on earnings.
Wednesday:
8:30 Weekly Initial Unemployment Insurance Claims are expected to come in at 240,000. A higher number could slow the rally while a lower number might assist it higher.
8:30 Philadelphia Fed manufacturing index is expect to come in at 1.6
10:00 Leading economic indicators are estimated to be negative 0.6%
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
