Stock Market Outlook for Fri May 24 2024 – Bounce Expected

Prior Trading Day Summary:

On Thu May 23 2024 NVIDIA Stock (NVDA) soared higher but couldn’t instill confidence in other names as well. Instead investors focus on the Weekly Initial Unemployment Insurance Claims which showed continued strength in the economy. Investors took the weekly unemployment numbers to show that the Fed could continue to hold off on cutting interest rates. As is typical of down days, selling dragged in more investors until by midday volume was almost totally being traded to the downside. By the close the S&P was down 39 points on 3.9 billion shares traded. Of those shares, 85% were being traded to the downside. This is the worst day since April 30 when 87% of volume was to the downside. On April 30, the SPX lost 80 points which, as you can see, was far more than Thursday’s 39 point loss.

The same with the NASDAQ which closed down 65 points. Unlike the SPX, 49% of all volume on the NASDAQ was to the downside. There were still a lot of buyers on Thursday, on NASDAQ stocks.

Let review the closing technical signals from Thu May 23 2024 to see whether there is a good chance for a bounce to end the week, or more selling.

Stock Market Outlook: SPX Closing Chart For Thu May 23 2024

The index closed above the 21 day moving average and the 50 day buy moved lower.

The closing candlestick is bearish for Friday but also points to a potential bounce for Friday.

The 21 day moving average is still climbing above the 50 day 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 4826 which is bullish and the 100 day is also climbing to 5037.

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

The S&P chart is bullish but with bearish signals of some concern for Friday.

SPX Stock Market Outlook review of Thu May 23 2024 – chart courtesy TradingView

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Fri May 24 2024 

For Friday there is a strong possibility of a bounce probably mid to late morning. The outlook though is more bearish than bullish, following Thursday’s sell-off and Friday could end lower ahead of the Memorial Long Weekend.

Watch for weakness on Friday and stay cautious when placing trades until the signal up turns solid for more than a day or two.

Potential Economic and Political Market Moving Events

On Wednesday we got May’s FOMC minutes. Those minutes weighed on investors Wednesday afternoon but also on Thursday.

Monday:

There are no reports released today.

Tuesday:

There are no reports released today.

Wednesday:

10:00 Existing home sales were expected to rise slightly to 4.21 million but fell to 4.14 million down from 4.22 million.

2:00 FOMC minutes for May’s meeting.

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims id estimated at 220,000 but came i n at 215,000.

9:45 S&P flash services PMI was estimated at 51.6 but came in stronger at 54.8

9:45 S&P flash services Manufacturing was estimated at 50 but came in h higher at 52.4.

10:00 New home sales are expected at 675,000 down from 693,000 but came in much lowe at 634,000.

Friday:

8:30 Durable Goods is expected to have slipped -0.5%

10:00 Consumer sentiment which is estimated at 67.6