Monday’s opening was strong which set the overbought index up for a dip back. The S&P couldn’t make any headway though and when word reached investors that smartphone shipments fell 9% in the second quarter despite high demand for the iPhone, that ended the rally. Investors decided to take profits, just in case the two-day rally might end.
By the close the S&P had fallen lower than even my estimates of 3840 on the low side. The index closed down 32 points at 3830.
The NASDAQ closed down 92 points at 11,360..
Let’s review the closing technical indicators from Monday to see what to expect for Tuesday July 19.
Stock Market Outlook Chart Comments At The Close on Mon Jul 18 2022
The closing candlestick is still bullish as it managed to stay above the 21 day moving average.
The 21 day moving average is turning up and trying to climb.
The Upper Bollinger Band is turning up and is above the 50 day moving average which is bullish.
The Lower Bollinger Band is now trending sideways. A Bollinger Bands Squeeze is still in play but it could still turn the index higher.
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 remains more bearish than it did at the close on Friday.
The chart is probably 20% bullish for Tuesday.
Stock Market Outlook review of Mon Jul 18 2022
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is falling 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 Monday the up signal held its 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 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 an up signal in place to start the week.
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 back negative.
- 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 but still 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 – Tue Jul 19 2022
The technical indicators had pointed to potential dips for Monday which could have been as low of 3840. Instead, disappointing smartphone sales news send the index down to 3820 and a close at 3830.
For Tuesday the morning looks weak to start with the technical indicators mixed, some pointing lower and others higher. Tuesday promises to be another choppy session which could start poorly but could still see stocks in the afternoon, hang on and close either flat or somewhat negative. The outlook then is choppy with a bias lower.
The uptrend from Thursday and Friday of last week is still intact, but Monday’s poor performance and lower than expected close has the market setup for choppy trading. If stocks hang on for Tuesday and can close positive, Wednesday has a good chance of being more bullish.
Potential Market Moving Events
This is a quieter week so the main focus will be on earnings.
Tuesday:
8:30 Building permits and Housing starts. Building permits are expected to be slightly weaker at 1.68 million but housing starts is expected to rise to 1.59 million.
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
