Day’s Summary
On Thursday with rising Treasury yields reaching levels not seen in years stocks couldn’t stand up to the pressure. It was a rough day for equities with the index breaking well below 4400 and closing below it.
For the S&P the index fell 34 points, closing at 4370. The NASDAQ lost 157 points to close at 13,316.
Let’s review the SPX index from Thursday to see what to expect for the final trading day of the week.
Stock Market Outlook: SPX Closing Chart For Thu Aug 17 2023
The index closed below the 50 day moving average for the second time since March. This is bearish and the closing candlestick is also bearish for Friday.
The closing candlestick on Thursday is bearish and as you can clearly see, it is signaling stocks are extremely oversold. With stocks below the 50 day I will be buying a few SPY ETF put contracts. More on that in the members Investing Strategy Notes for today.
The 21 day moving average falling sharply. The 50, 100 and 200 day moving averages are continuing to climb which is bullish but the 50 day will start to turn lower, early next week unless the market can bounce..
The Lower Bollinger Band is still falling which bearish. The Upper Bollinger Band is turning higher which may signal a potential bounce. If it turns down on Friday it will signal more selling likely next week. The latest Bollinger Bands Squeeze is over and stocks are falling lower, pressuring the Lower Bollinger Band lower. This is bearish. The S&P is very bearish.
Stock Market Outlook review of Thu Aug 17 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and negative. It is signaling oversold.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thursday Jul 27. On Thu Aug 17 2023 the down signal was stronger. It is at a level where often we will see a strong bounce.
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Ultimate Oscillator: The Ultimate Oscillator is falling, negative and oversold.
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Slow Stochastic: The Slow Stochastic has a down signal in place. It is extremely oversold and signaling a bounce is coming.
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Relative Strength Index: The RSI signal is falling sharply and oversold.
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Rate of Change: The rate of change signal is falling and deeply oversold.
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Stock Market Outlook: Support and Resistance Levels |
| 4600 is resistance |
| 4575 is resistance |
| 4550 is resistance |
| 4525 is resistance |
| 4500 is resistance |
| 4485 is resistance |
| 4470 is support |
| 4450 is support |
| 4435 is support |
| 4420 is support |
| 4400 is support |
| 4390 is support |
| 4370 is support |
| 4350 is support |
| 4340 is support |
| 4325 is support |
| 4310 is support |
| 4300 is support |
| 4290 is support |
| 4275 is support |
| 4250 is support |
| 4240 is support |
| 4225 is support |
| 4210 is support |
| 4200 is good support |
Stock Market Outlook for Fri Aug 18 2023
For Friday every technical indicator is extremely bearish and all are signaling oversold. Some are extremely oversold like the Slow Stochastic. It is at a level where a bounce would be rare not to happen.
For Friday stocks have a good chance to bounce as the index closed down 5% from its recent high made at the end of July. 5% is often a good entry for investors but we may find that Friday sees a bounce, but it may not hold until there are more signals that Treasury yields are not going to rise further.
On Friday then, watch for a bounce as the index is extremely oversold but keep your eye on Treasury yields. If they rise further, expect stocks to move lower. But, if yields dip, stocks will rally.
Potential Economic and Political Market Moving Events
Friday:
Nothing is scheduled for today