Stock Market Outlook for Fri Aug 9 2024 – Some Weakness – Bounce Likely – Higher Close

Prior Trading Day Summary:

Thursdays bounce ended up being the best one day rally since 2022 with the SPX gaining 120 points in a wide ranging rally and closing at 5319.

The NASDAQ rose 464 points with 71% of all stocks in the index rising. The index closed at 16,660.

As discussed prior, the S&P needed to close above 5300 to gain some investor confidence. With the close above 5300, the SPX will dip on Friday possibly more than once but should have enough investor interest to close higher by the end of the day.

So does Thursday’s market action signal the end of the present correction?  For that answer let’s review the closing technical indicators from Thu Aug 8 2024 to see what the signals advise for Fri Aug 9 2024.

Stock Market Outlook: SPX Closing Chart For Thu Aug 8 2024

The index rebound held on Thursday and the index closed back above the 100 day moving average. This is bullish.

The closing candlestick indicates the index closed at the highs of the day. The candlestick is bullish but also signals some dips should be expected on Friday as the rally was very strong.

The 21 day moving average is falling which is bearish. It is nearing crossing below the 50 day which would be a down signal.

The 50 day moving average is falling. This is bearish.

The 200 day moving average is slowing its uptrend. The 200 day is at 5075 which is still bullish. The 100 day stayed at 5300 which is bearish. Only the 200 day moving average is still rising.

The Lower Bollinger Band is below the 100 day moving average and falling. This is bearish. The Upper Bollinger Band is turning lower which is also bearish.

The S&P chart is bearish with only the 200 day moving average and the closing candlestick remaining bullish. All the other technical indicators are pointing lower which indicates the downtrend may not be over.

SPX Stock Market Outlook review of Thu Aug 8 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Fri Aug 9 2024 

For Friday the technical indicators are showing some relief and a number of indicators are rising but they are remaining negative even as they rise. The close on Thursday above 5300 was important both technically and emotionally but the index will slip below 5300 today, perhaps more than once. There should though be enough strength to see a positive close.

So is the correction over? The indicators are still showing that down momentum is growing rather than decreasing. The index has to stay above 5300 other wise the rally will fail next week. The chance the correction is over is low at present. We will have a better idea after we see trading action on Friday.

The Weekly Initial Unemployment Insurance Claims on Thursday came in at 233,000 which was below estimates of 240,000. The number indicates employment is continuing which disagrees with the July non-farm payroll number which is what sparked this week’s sell-off. I won’t be surprised when we get the August non-farm payroll number at the start of September, if July’s number is revised higher.

Potential Economic and Political Market Moving Events

Monday:

9:45 Final services PMI came in at 55, down slightly from 55.9

10:00 ISM services rose to 51.4% from 50.9%

Tuesday:

8:30 Trade deficit for June was expected to be -72.5 billion but came in at -$73.1 billion

Wednesday:

3:00 Consumer Credit was expected to fall to $9.7 billion from $11.3 billion prior. Instead it fell to $8.9 billion.

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims were expected to come in at 240,000 but came in lower at 233,000 which is a signal of employment growth.

10:00 Wholesale inventories met estimates of 0.2%

Friday;s

There are no events