Stock Market Outlook for Fri Nov 10 2023 – Fed Sinks Rally – Lower Close Expected

Prior Trading Day Summary:

On Thu Nov 9 2023  two things ended what has been a spectacular 9 day rally. The first was the lack of demand for a 30 year bond auction which surprised investors and caused stocks to fall. Then comments from Fed Chair Powell at the IMF conference turned hawkish. Investors, who thought no more interest rate hikes were likely, decided to take profits and move again to the sidelines.

The SPX closed down 35 points at 4347, which was basically back at the 4350 support level.

The NASDAQ lost 128 points to close at 13,521.

For the SPX, the key test will be the 4300 level. As long as it holds, the rally will remain intact.

Let’s review the closing technical indicators from Thu Nov 9 2023 to see what to expect for Fri Nov 10 2023.

Stock Market Outlook: SPX Closing Chart For Thu Nov 9 2023

The index closed above all major moving averages but at the 50 day moving average.

The closing candlestick ended the day just below 4350 at the low of the day which usually means a bumped higher at the open or near the open should be expected before more selling arrives.

The 21 day moving average bounced off the 200 day on Thursday last week but yesterday’s sell-off sent the 21 day back toward the 200 day. It also sent the 50 day lower and near the 100 day. Either of these could end up being another sell signal, if stocks continue lower on Friday and the start of next week.

The Lower Bollinger Band is turning lower which is bullish. The Upper Bollinger Band is turning sideways which could signal a move lower tomorrow.

The S&P chart is bearish. SPX 4300 is critical for the rally.

Stock Market Outlook review of Thu Nov 9 2023

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Fri Nov 10 2023 

Last week the Fed Chair’s comments were deemed dovish and the market rally commenced. Today the Fed seemed to decide that the rally had to be stopped. His comments were not all that different from what he said last week which started the rally. However his tone seemed more hawkish and that, combined with the poor bond performance, sent investors into a selling mood.

The SPX must hold above 4300 to keep the rally alive.

All the technical indicators lost strength and all are pointing to a lower day on Friday.  Bond markets are closed today and normally that is positive for stocks. That may not be the case today. Watch for a bounce to start the day but then further selling and a  lower close.

Potential Economic and Political Market Moving Events

This week bond markets are closed on Friday which often assists the bulls on Friday. Historically this is a strong week for stocks.

Monday:

There are no economic reports

Tuesday:

8:30 Trade Deficit is expected at -$59.8 billion but came in at -$61.5 billion.

3:00 Consumer credit os expected to be $9.5 billion

Wednesday:

9:15 Powell delivers opening remarks

10:00 Wholesale inventories are expected to be flat at 0.0%

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are expected to be 220,000 but came in at 217,000

2:00 Fed Chair Powell is on a panel at the IMF conference

Friday:

10:00 Consumer sentiment is expected to come in at 63.7%