Prior Trading Day Summary
On Thu Oct 16 2025 stocks started the day higher breaking above 6700 but not moving as high as we say yesterday (Wed Oct 15 2025) when the SPX brushed against the 6725 valuation. Today it was all about bank worries but this time concentrated on regional banks. The concern is on regional banks’ exposure to bad loans. The selling commenced with Zions Bancorp (ZION) disclosing they would take a $50 million loss in the third quarter due to bad loans. Their stock sank 13%. Anything due to bank credit worries immediately worries investors who still have not forgot the 2008-2009 credit crisis. However this time around the damage seems to be primarily regional banks. The large banks like JP Morgan Chase Stock (JPM) were still affected but to a much smaller degree. JP Morgan Chase Stock (JPM) for example, fell 2.34%. Citigroup Stock (C) fell 3.5%. By the end of the day all indexes were lower as stocks gave back the morning gains.
The S&P closed down 42 points to 6629. By the close 71% of all stocks were falling. For the week however, the index is still up 76 points.
The NASDAQ fell 107 points to close at 22,562. At the close 69% of all stocks on the index were falling. For the week though, the NASDAQ is still up 358 points.
The technical indicators continuing to lose strength and lower signals are creeping into the technical outlook. Some of this is the continued government shutdown as well as uncertainty over trade with China. Considering all the concerns at this point, the markets are actually hanging on better than expected. Bond yields were lower today but gold prices were higher and the VIX which measures volatility was at its highest level since late April at 25.31.
Lets review the closing technical indicators from Thu Oct 16 2025 to see what they advise investors for the final trading day of the week, Fri Oct 17 2025.
Stock Market Outlook: SPX Closing Chart For Thu Oct 16 2025
The index closed below the Upper Bollinger Band and the 21 day moving average. It came close to reaching the Lower Bollinger Band. This is bearish.
The closing candlestick is signaling more weakness expected for Friday. We could see another day where the index opens higher in the morning but moves lower in the remainder of the day.
The 21 day moving average is rising and closed at 6672 which is bullish.
The 50 day moving average is rising and closed at 6557 which is bullish.
The 100 day moving average is rising and closed at 6378 which is bullish.
The 200 day moving average is rising and closed at 6141 which is bullish.
The Lower Bollinger Band is above the 50 day moving average and is moving sideways which is neutral. The Upper Bollinger Band is turning lower which is bearish. The chance of a Bollinger Bands Squeeze is high and could start on Friday or early next week. The outlook at present is for the squeeze to send stocks lower.
The SPX chart is a lot more bearish than bullish for Friday. All moving averages are above 6100 which is bullish for further advances. The 21 day advanced just a single point on Thursday which is a poor sign and a signal weakness is continuing to grow.
SPX Stock Market Outlook review of Thu Oct 16 2025
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and the most negative it has been in months. Usually a bounce could be expected but at present it looks likely momentum will grow further to the downside.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thu Oct 9 2025. On Thu Oct 16 2025 the down signal gained more strength. It is at a point where often a bounce can occur but at present seems unlikely.
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Ultimate Oscillator: The Ultimate Oscillator is falling.
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Slow Stochastic: The Slow Stochastic has an up signal in place but it is weak and ready to turn to a down signal if Friday ends up being lower.
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Relative Strength Index: The RSI signal is falling sharply.
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| Rate of Change: The rate of change is falling deeply and ready to turn negative. It is signaling a lower day for Friday. 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 |
| 6775 is resistance |
| 6750 is resistance |
| 6715 is resistance |
| 6700 is resistance |
| 6675 is resistance |
| 6650 is resistance |
| 6625 is resistance |
| 6600 is resistance |
| 6590 is resistance |
| 6570 is resistance |
| 6550 is support |
| 6500 is support |
| 6450 is support |
| 6425 is support |
| 6400 is support |
| 6350 is support |
| 6325 is support |
| 6300 is support |
| 6250 is support |
| 6225 is support |
| 6200 is support |
Stock Market Outlook for Fri Oct 17 2025
For Fri Oct 17 2025 the outlook is for more weakness and a lower close. Stocks may try to open higher and may try to build some strength or momentum to the upside but without a catalyst, any upside action on Friday appears doomed to fail. If the morning opens higher, I may buy 300 shares of the SQQQ ProShares UltraPro 3X Short NASDAQ 100 (SQQQ). When you consider all the negatives facing stocks you would expect equities to be lower but overall for the week, the indexes are still positive. Although a lower close is expected for Friday, I am not expected a lower close that wipes out the week’s gains for either the SPX or NASDAQ. Part of the strength in stocks comes from investors’ belief that the Oct 28 and 29 Fed meeting will see another quarter point rate cut. Some analysts believe a half point rate cut could happen. This is helping keep stocks at present levels as many investors believe once there is a trade deal with China, stocks will climb higher.
Potential Economic and Political Market Moving Events
Monday:
Columbus Day
Thanksgiving holiday in Canada – no trading
Tuesday:
6:00 NFIB optimism index came in at 98.8, well below the prior reading of 100.8.
Wednesday:
8:30 Empire state manufacturing survey.
2:00 Fed’s beige book will be released
Thursday:
No reports due to government shutdown
Friday:
No reports due to government shutdown