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Stock Market Outlook for Fri Jun 21 2024 – Weakness – Choppy Bias Lower

Jun 21, 2024 | Stock Market Outlook

Stock Market Outlook - Choppy Bias Lower

Prior Trading Day Summary:

On Thursday the S&P shot above 5500 for the first time which brought in sellers. With volume rising in the afternoon the index slipped to close at 5473 down 14 points. 57% of all volume was trading lower but only 47% of stocks were falling in what was basically a weak day after making a new all-time high intraday.

The NASDAQ had a weak day as well, falling 140 points as semiconductor stocks dipped slightly. The index closed at 17,721 with 53% of all stocks falling.

Let’s review the closing technical signals from Thu Jun 20 2024 to see what to expect for Fri Jun 21 2024.


Stock Market Outlook: SPX Closing Chart For Thu Jun 20 2024

The index closed above the 21 day moving average and at the Upper Bollinger Band. This is bullish and signals overbought.

The closing candlestick is bearish for Friday and indicates a good chance of a dip.

The 21 day moving average is still climbing continuing the latest up signal.

The 50 day moving average is climbing which is bullish.

The 200 day moving average is still climbing. The 200 day is at 4914 which is bullish and the 100 day is also climbing to 5137.

The Lower Bollinger Band is below the 50 day moving average and the Upper Bollinger Band is rising. This is bullish.

The S&P chart is bullish for Friday but with a warning of another choppy trading and a potential dip for the day.

SPX Stock Market Outlook review of Thu Jun 20 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 Thu Jun 6 2024. On Thu Jun 20 2024 the up signal was stronger. The MACD histogram lost some strength.

  • 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 falling 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 neutral signal in place 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 signaling that Friday will end lower.

  • 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

5500 is resistance
5490 is resistance
5475 is resistance
5465 is resistance
5450 is resistance
5425 is resistance
5400 is resistance
5375 is resistance
5350 is resistance
5325 is resistance
5310 is resistance
5300 is support
5275 is support
5250 is light support
5225 is light support
5200 is good support
5190 is light support


Stock Market Outlook for Fri Jun 21 2024 

The SPX breaking above 5500 was dramatic on Thursday but the push back by sellers on the spike to another new all-time high, was not unusual. The SPX will revisit 5500 shortly but on Friday we will see choppy trading and a probable lower close. On Thursday investors felt the housing starts and building permits coming in lower than estimated, were bullish for the Fed to consider cutting interest rates by August. This helped spark the rally to above 5500. On Friday we get triple witching which can often see choppy and volatile trading. A lower close on Friday will not signal a change in the SPX trend. I expect the SPX to move higher next week.


Potential Economic and Political Market Moving Events

The biggest economic events this week are retail sales on Tuesday and PMI numbers on Friday.

Monday:

8:30 Empire State manufacturing survey is expected to rise to -10.5 from -15.6 prior

Tuesday:

8:30 Retail sales are estimated to rise slightly to 0.2% from 0.0%

9:15 Industrial production is estimated to rise to 0.4% from 0.0%

9:15 Capacity utilization is estimated at 78.6% versus 78.4% prior

10:00 Business inventories are expected to rise to 0.3% from -0.1%

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims were expected to dip to 235,000 from 242,000 prior but came in at 238,000, stronger than expected

8:30 Current Account for the second quarter is expected to increase to -$207.4 billion from -$194.8 billion prior

8:30 Housing starts were estimated at 1.38 million, up slightly from 1.36 million prior but came in lower at 1.28 million

8:30 Building permits were estimatesdto rise to 1.45 million, up slightly from 1.44 million but came in lower at 1.39 million

8:30 Philadelphia Fed manufacturing survey was estimated to rise to 5.0 from 4.5 prior but stunned coming in at just 1.3

Friday:

9:45 S&P flash services PMI is estimated at 54.0

9:45 S&P flash manufacturing PMI is estimated at 51.0

10:00 Existing home sales are estimated to drop to 4.08 million

10:00 Leading economic indicators are expected to rise to -0.3% up from 0.6%






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