Stock Market Outlook for Fri May 17 2024 – Overbought – Choppy Bias Lower

Prior Trading Day Summary:

On Thursday many investors took profits with indexes sitting at all-time highs. Trading volume on the NASDAQ was the highest in over a year with more than 12 billion shares traded. The SPX saw just shy of 4 billion shares traded.

By the close, the SPX was lower by 11 points to close at 5297.

The NASDAQ had a second day of huge volume and lost 44 points to close at 16,698.

Let review the closing technical signals from Thu May 16 2024 to see what to expect on Fri May 17 2024.

Stock Market Outlook: SPX Closing Chart For Thu May 16 2024

The index closed above the 21 day moving average and the 50 day and at the Upper Bollinger Band. This is bullish.

The closing candlestick however is a bit bearish for Friday and is signaling a lower day should be expected.

The 21 day moving average is still below the 50 day moving average for a down signal but turning up. This is bullish.

The 50 day moving average is climbing which is bullish.

The 200 day moving average is still climbing. The 200 day is at 4801 which is bullish and the 100 day is also climbing to 5009.

The Lower Bollinger Band is below the 100 day moving average and falling. This is bullish. The Upper Bollinger Band is turning higher. This is bullish.

The S&P chart is bullish for Friday with a warning from the closing candlestick.

SPX Stock Market Outlook review of Thu May 16 2024 – chart courtesy TradingView

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Fri May 17 2024 

On Thursday high volumes on the NASDAQ indicates investors are taking profits and probably repositioning capital. This is not unusual, with the indexes at all-time highs.

The closing candlestick is signaling that Friday could see a further bit of weakness although a move back above 5300 is likely, at least for some of the day.

The Weekly Initial Unemployment Insurance Claims on Thursday came in almost as expected at 222,000 which supports the theory that employment is showing signs of slowing.

Housing starts and building permits also fell, once again feeding the theory that the economy is slowing and the Fed should begin reducing interest rates shortly.

For Friday watch for some weakness and a probable lower close.

Potential Economic and Political Market Moving Events

There were a number of reports this week that impacted markets. The Producer Price Index on Tuesday and Consumer Price Index on Wednesday moved markets.

Monday:

There are no reports released today.

Tuesday:

8:30 Producer Price Index reports

10:00 Fed Chair Powell speaks

Wednesday:

8:30 Consumer Price Index reports

8:30 Retail sales with and without autos

10:00 Home builder confidence index

10:00 Business inventories

Thursday:

Weekly Initial Unemployment Insurance Claims were expected to be 221,000 but came in at 222,000

8:30 Housing Starts were expected to rise to 1.4 million but fell to 1.36 million.

8:30 Building permits were expected to rise to 1.48 million but fell to 1.44 million.

8:30 Import price index was expected to be 0.3% but came in at 0.9%

9:15 Capacity utilization was estimated unchanged at 78.4% and came in as expected at 78.4%

Friday: 

10:00 Leading economic indicators are estimated at -0.3%