On Wed Jul 28 2021 the morning was spent with the SPX trading almost sideways until the lunch hour when sellers pushed the index to the low of the day down to 4387. That though also coincided with the Fed’s announcement at 2:00 PM which then saw a rally develop as the Fed basically changed none of the prior stances but simply “kicked the can further down the road”. By 2:50 the SPX had reached the day’s high of 4415 before selling once again erupted and sent the index to a flat close with a loss of less than 1 point.
It was a sideways days with a mixed outlook. Let’s review the technical indicators at the close on Wednesday to see what investors should expect for Thursday, the second last trading day of July.
Stock Market Outlook Chart Comments At The Close on Wed Jul 28 2021
On Wednesday the S&P trading in a tighter range than we saw on Tuesday. This left behind a neutral candlestick which often signals the following day will close slightly higher.
The Upper Bollinger Band is climbing again while the Lower Bollinger Band is stick around the 50 day moving average. Both signals are more bullish than bearish at present.
All the major moving averages are still climbing which is bullish.
Stock Market Outlook review of Wed Jul 28 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling and still 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 Mon Jul 26. On Wednesday the up signal weakened.
- 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 and overbought for a second straight day.
- 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 still 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 unchanged.
- 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 indicating we could see less movement in prices on Thursday.
- 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:
4400 is resistance
4370 is resistance
4350 is light support
4300 is light support
4290 is light support
4270 is light support
4250 is light support
4225 is light support
4200 is light support
4175 is light support
4150 is light support
4100 is good support
4070 is light support
4050 is light support
4000 is good support
3900 is support
3850 is support
3800 is support
3750 is good support
3700 is light support
3680 is light support
3600 is strong support
Stock Market Outlook for Tomorrow – Thu Jul 29 2021
For Thursday, the technical indicators are still a bit mixed but more have turned lower and are falling. Even the new up signal from the MACD indicator has lost strength after just issuing the up signal on Monday.
The Rate Of Change however is signaling that it expects little movement in prices once again on Thursday.
The outlook is rather mixed once again but clues can be seen in the closing candlestick which often is seen before a positive day and the Rate Of Change which is unconcerned about further selling.
Thursday will be another rather choppy day with a chance for a lower close but a greater chance for a slightly higher end to the day.
This is the second last day of trading for July. Facebook and PayPal may weigh on the NASDAQ on Thursday which could be the impetus for a lower close. On the positive side, earnings from Ford (F), Qualcomm (QCOM), Service Now (NOW), Aflac (AFL) and Canadian Pacific Railway (CP) which reported record earnings will assist to the upside. As well no change from the Federal Reserve remains supportive. Thursday definitely will be an interesting day for stocks.
Stock Market Outlook Archives
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