Monday July 1 saw all 3 indexes open higher. The S&P opened at a record new high. The rally though slowly faded as the day wore on. Not until near the end of the day did the rally recommence and the S&P closed at 2964, a new closing higher.
Stock Market Outlook Chart Comments At The Close on Mon Jul 1 2019
The index closed below the Upper Bollinger Band but above all the major moving averages. The closing candlestick was bullish for Wednesday. The most important aspect of the chart is the moves in the Bollinger Bands. You can see the Upper Bollinger Band is falling rapidly while the Lower Bollinger Band is rising rapidly. A Bollinger Bands Squeeze looks ready to form up by the start of next week. The outlook is for the squeeze to end with the index pushing to new highs, but sometimes markets surprise and the index could slip back. Friday will be very important for the S&P direction.
The buy signal from July 1 is a lot stronger today. All the other moving averages are rising strongly and the 200 day is moving above the 2800 valuation which is bullish.
The chart is very bullish but the upcoming Bollinger Bands Squeeze is a bit of concern.
Stock Market Outlook review of Tue Jul 2 2019
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is positive but falling ahead of the half day on Wednesday and June unemployment report.
- 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 stronger on Tuesday.
- 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 and still rising.
- 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 an up signal in place.
- 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 also 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 Resistance Levels To Be Aware Of:
2950 is resistance
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 – Wed Jul 3 2019
The technical indicators are now all positive and all are rising, indicating strength in the move higher.
Wednesday is half a day for trading with markets closing at 1:00 PM.
The outlook is for the S&P to stay somewhat sideways but climb in the shorter day and end higher ahead of Thursday’s holiday and Friday’s June non-farm payroll report.
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