Stock Market Outlook for Tue Jul 9 2019 – Dips and Spikes But Slightly Lower By The Close

Monday opened with stocks falling. The rebound rally I was waiting for failed to bounce beyond 2980 and the index spent the day in a tight trading range between 2970 and 2980. At the close the index was down a few points ending the day at 2975.96.

Stock Market Outlook Chart Comments At The Close on Mon Jul 8 2019 

The index closed below the Upper Bollinger Band and above all the major moving averages.  The closing candlestick was bearish for Tuesday. The Bollinger Bands are both moving higher which often indicates that at present we are in a short sideways period while the market builds momentum for more upside action shortly.

The buy signal from June 28 with the 21 day moving above the 50 day, is still gaining strength.

The 200 day moving average is now above the 2800 level which is bullish.

The chart is very bullish aside from the bearish candlestick for Tuesday.

Stock Market Outlook review of Jul 8 2019

Stock Market Outlook: Technical Indicators Review:

Momentum: Momentum is positive and falling.

• Settings: For momentum I use a 10 period when studying market direction.

MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thursday June 6. The up signal was weaker on Monday.

• 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 signal is positive but 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 signal has a down signal in place for Tuesday 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 falling.

• 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 lower prices lie ahead.

• 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:

3000 is resistance

2950 is light support

2900 is light support

2860 is better support

2830 is light support

2800 is strong support

2795 is light support

2745 to 2750 is light support

2725 is light support

2700 is light support

2675 is light support

2650 is support

2625 is light support

2600 is support.

There was good support at the 2550 level which is back to being support.

The 2500 level is support.

The S&P has light support at 2480 and better support at 2450.

There is good support at 2425.

Below that there is some support at 2400, 2380, 2350.

 Stock Market Outlook for Tomorrow – Tue Jul 9 2019 

Investors held back on Monday while they wait for the testimony from Fed Chair Powell to Congress. The index was stuck is a very tight 10 point range on Monday.

The technical indicators are all quite strong but are continuing to dip and weaken. The Slow Stochastic issued a down signal today.

Technical indicators point to more weakness on Tuesday but no major move lower. As long as the Fed Chairman doesn’t sink stocks with his testimony starting on Tuesday, the index should move higher after or by Wednesday.

For Tuesday, the outlook is for a slightly lower close again for both indexes.

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