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Stock Market Outlook for Fri Feb 16 2024 – Dips Likely -Still Bullish But Potential Lower Close

Feb 16, 2024 | Stock Market Outlook

Stock Market Outlook Dips LikelyPrior Trading Day Summary:

On Thursday investors continued to push stocks higher with the SPX rising 29 points to close at 5029. Trading volume was 4.2 billion shares, better than yesterday’s rally. New highs jumped to 217 stocks while new lows dropped to just 14. For the week, the SPX is up 3 points, fully recovering the loss on Tuesday.

The NASDAQ gained 47 points to close at 15, 906. For the week the index is still down 84 points. On Thursday, 6.2 billion shares were traded. This is the highest volume since Jan 16.

Overall it was a positive day across the wide market breadth of the markets. Even the Dow Jones rose 348 points which is just 24 points from where the index closed on Monday before Tuesday’s sell-off.

Let’s review Thursday’s closing indicators to see what to expect for the final day of the week, Fri Feb 16 2024.

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Stock Market Outlook: SPX Closing Chart For Thu Feb 15 2024

The index rose further above the 21 day moving average. It closed below the Upper Bollinger Band at the 5030 valuation. This is bullish.

The closing candlestick is bullish for Friday but also signals with a long shadow there is a good chance we will see a dip on Friday.

The 21 day moving average is moving higher which is bullish. It is above 4925 on the SPX.

The 50 day moving average is rising and at 4800 which is bullish.

The 100 and 200 day moving averages are climbing which is bullish. The 200 day is at 4500 on the SPX which is bullish.

The Lower Bollinger Band is rising as is the Upper Bollinger Band which is bullish. If the Lower Bollinger Band moves above the 50 day moving average it will be entering another Bollinger Bands Squeeze.

The S&P chart is more bullish than bearish for Friday.

Stock Market Outlook review of Thu Feb 15 2024


Stock Market Outlook: Technical Indicators Review

Momentum: Momentum is falling 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 Tue Jan 23 2024. On Thu Feb 15 2024 the up signal is almost gone.

  • 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 unchanged and positive.

  • 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 a down signal in place and is overbought. It may issue an up signal on Friday.

  • 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 and positive. It is nearing overbought.

  • 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 and signaling Friday should be higher.

  • 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.

Stock Market Outlook: Support and Resistance Levels

5075 is resistance
5050 is resistance
5025 is resistance
5010 is resistance
5000 is resistance
4990 is resistance
4975 is resistance
4950 is resistance
4925 is resistance
4915 is resistance
4900 is resistance
4875 is support
4850 is support
4825 is support
4815 is support
4800 is support
4780 is support
4750 is support
4720 is support
4700 is support


Stock Market Outlook for Fri Feb 16 2024 

With the losses from Tuesday fully recovered on the SPX, the index could dip on Friday although the indicators are primarily still pointing to another higher close. With Monday a holiday, we could see low volume today which normally supports the bullish outlook.

Any dips on Friday are still opportunities to setup trades as the outlook for the start of next week is bullish.

On Thursday the economic reports were mixed which you can review below but retails sales were lower than estimated which concerned investors when the news was first released.

On Friday investors get a number of reports with the most important being PPI. Any significant misses in PPI could see stocks slip or jump depending on the miss.


Potential Economic and Political Market Moving Events

Inflation on Tuesday with CPI reports and on Thursday a myriad of economic reports will have the most impact this week.

Monday:

No reports that will impact stocks

Tuesday:

8:30 Consumer prince index is expected to drop to 0.2% from 0.3% but instead stayed at 0.3%

8:30 Core CPI is expected to be unchanged at 0.3% and came in as expected.

8:30 CPI year-over-year is expected to have fallen to 2.9% from 3.4% but instead fell to 3.1%

8:30 Core CPI year-over-year is estimated to have fallen to 3.7% from 3.9% but instead stayed at 3.9%

Wednesday:

Two Fed Officials speak but there are no economic reports that will impact stocks.

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims were expected to rise to 220,000 but came in at 212,000

8:30 Empire State manufacturing survey was expected to rise to -12.5 from -43.7 but rose to -2.4 showing more strength

8:30 Philadelphia Fed manufacturing survey was expected to rise to -9.0 from -10.6 but rose to 5.2 also much stronger than expected

8:30 Import Price Index was expected to dip to -0.1% from 0.0% but rose to 0.8 which could be considered inflationary

8:30 Retail sales were estimated to fall to -0.2% from 0.6% but fell to -0.8% which shows weakness among consumers

9:15 Industrial production was estimated to rise to 0.2% from 0.1% but fell to -0.1% showing weakness

10:00 Home Builder confidence index was estimates to rise slightly to 46 from 44 but rose to 48

Friday:

8:30 Housing starts are expected at 1.45 million

8:30 Building permits are expected at 1.50 million

8:30 Producer price index is estimated to be 0.1%

8:30 Core PPI is expected to be 0.1%

8:30 PPI year-over-year is estimated to be 1.1%

8:30 Core PPI year-over-year is estimated to be 2.5%

10:00 Consumer sentiment is expected to be 80.0

 






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