Friday saw indexes close higher to start the month of July. Historically the first day of July has been higher the majority of the time. However July often sees swings in volatility which can catch investors unprepared.
On Friday the S&P closed up 40 points to end the day at 3825. The NASDAQ closed up 99 points to 11,128.
Let’s review Friday’s closing technical indicators to see what they predict for the start of the first week of July.
This is a busy week of earnings and economic numbers including the June non-farm payroll numbers on Friday. This is often a market moving event.
Stock Market Outlook Chart Comments At The Close on Fri Jul 1 2022
On Friday the closing candlestick is bullish and points to a chance for a higher day on Tuesday.
The Upper Bollinger Band is still below the 200 day moving average which is another down signal for the index.
All the moving averages are falling.
The Lower Bollinger Band is still falling which is bearish.
There are no bullish signals for Tuesday aside from the closing candlestick.
There are 4 down signals still in place and there have been no up signals since the start of April.
The chart is 90% bearish for Tuesday.
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 Friday the up signal gained strength as did the MACD histogram.
- 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 rising.
- 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 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 support
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 5 2022
For Tuesday the technical indicators are mixed but there are a number showing some strength to start the day on Tuesday.
Tuesday has a good chance to see a higher close.
Potential Market Moving Events
For the first week of July the biggest event in on Friday when the June unemployment report is released.
10:00 Factory orders
2:00 FOMC minutes
8:30 Weekly Initial Unemployment Insurance Claims
8:30 June nonfarm payroll report are expected to show 250,000 jobs created