On Thursday investors got what they had wanted for months, a sign of unemployment probably rising. The Weekly Initial Unemployment Insurance Claims rose to 231,000 which was above estimates and a 3 month high. While the number still points to low numbers for jobs being lost, it was another sign this week of a potential slowing economy. Yet instead of rallying, investors held back while analysts began to wonder about a recession and not the so-called “soft landing” that just days before analysts had said seemed definitely “in the cards”. With talk about potential recession to start 2024 and probably no interest rate cuts until mid to late 2024, investors were hesitant and stocks spent the day wandering from negative to positive and then negative and finally positive into the close.
The S&P closed up 5 points to 4508 on declining volume of 4 billion shares traded. The NASDAQ closed up 9 points to 14,113 on 600 million less shares at 4.6 billion. A fair amount of selling took place on Thursday with Walmart trading 32 million share over six times the usual daily volume. The stock closed down almost $14 for a loss of 8% at $156.05.
Cisco Stock (CSCO) fell deeper, losing almost 10% of its value to close at $48.04. Daily volume was a staggering 78 million shares traded 4.5 times the normal daily volume. Both of these stocks dragged the Dow Jones lower and weighed negatively across most of the stock market.
Let’s review the closing technical indicators from Thu Nov 16 2023 to see what to expect for Fri Nov 17 2023.
Stock Market Outlook: SPX Closing Chart For Thu Nov 16 2023
The index closed above all major moving averages but moved away from the Upper Bollinger Band. The outlook is still bullish.
The closing candlestick ended the day above 4500 which is bullish but the candlestick is signaling weakness for Friday with a 50/50 chance for a higher close.
The 21 day moving average continued to climb away from the 200 day which is bullish. The 50 day moving average is beginning to move above the 100 day which is bullish.
The 200 day moving average is climbing which is bullish.
The Lower Bollinger Band is moving lower which is bullish. The Upper Bollinger Band is turning higher which is also bullish.
The S&P chart is more bullish than bearish heading into Friday but is still overbought..
Stock Market Outlook: Technical Indicators Review
|Momentum: Momentum is falling and positive.|
|MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thu Nov 2. On Thu Nov 16 2023 the close saw a strong up signal.|
|Ultimate Oscillator: The Ultimate Oscillator is rising and positive. It is signaling overbought.|
|Slow Stochastic: The Slow Stochastic has a neutral signal in place and is very overbought.|
|Relative Strength Index: The RSI signal is unchanged and positive. It is signaling overbought.|
|Rate of Change: The rate of change signal is rising and positive. It is signaling tomorrow we could see a larger move than we saw Thursday, up or down.|
Stock Market Outlook: Support and Resistance Levels
|4520 is resistance|
|4500 is resistance|
|4490 is resistance|
|4475 is resistance|
|4450 is resistance|
|4440 is resistance|
|4425 is support|
|4400 is support|
|4375 is support|
|4350 is support|
|4325 is support|
|4300 is support|
|4275 is light support|
|4250 is light support|
|4235 is light support|
|4225 is support|
|4200 is good support|
|4185 is support|
|4175 is support|
|4150 is good support|
Stock Market Outlook for Fri Nov 17 2023
The technical indicators are still bullish but are still signaling overbought. There are also signals advising some weakness should be expected for a second day on Friday. However for now, dips are still opportunities to setup trades.
At the close the outlook is still higher for stocks.
On Thursday most of the economic reports that were released (see below) show there is slowing in the economy. This was another reason for a lack of buying on Thursday as investors weigh the possibility that a recession could be early next year.
Potential Economic and Political Market Moving Events
Friday is Housing starts and building permits.
2:00 Monthly US federal budget expect at -$70 billion.
8:30 Consumer Price Index is expected to be just 0.1% for October and came in at 0.0%.
8:30 Core CPI is expected to be unchanged at 0.3% and came in at 0.0%
8:30 CPI year-over-year is expected at 3.3% which is lower than Sept’s 3.7%. Came in at 3.2%
8:30 Core CPI year-over-year is expected to be unchanged at 4.1% but came in at 4.0%
A miss to the downside will be positive for stocks. A miss to the upside will be negative for stocks.
8:30 Producer Price Index is estimated to fall to 0.1% but came in at -0.5%
8:30 Core PPI is estimated unchanged at 0.2% but came in at 0.1%
8:30 PPI year-over-year is estimated unchanged at 2.2% but came in at 1.3%
8:30 Retail sales are estimated to fall to -0.2% but were slightly stronger at -0.1%
8:30 Empire state manufacturing survey estimates to rise to -3.0 stunned with a reading of 9.1
10:00 Business inventories were unchanged at 0.4%
8:30 Weekly Initial Unemployment Insurance Claims are estimated at 222,000 but came in at 231,000
8:30 Philadelphia Fed manufacturing survey expected to come in at -7.5 but came in at -0.8%
9:15 Industrial production is expected at -0.4% but was lower at -0.6%
9:15 Capacity utilization is expected at 79.3% but was almost unchanged at 79.5%
10:00 Home-builder confidence index is estimated at 40 but fell to 34
8:30 Housing starts are expected at 1.35 million
8:30 Building permits are estimated at 1.45 million