Prior Trading Day Summary:
With the Producer Price Index numbers on Thursday in-line with estimates, the market moved higher as investors bet on a 50 basis point cut by the Fed rather than 25 basis point next week. There are though many analysts who believe a 50 basis point cut would signal concern by the Fed of a potential recession and they believe the market could initially jump but then sell lower in following weeks. Whatever happens next week, on Thursday another rally has the indexes back near the highs before the sell-off which culminated on Sep 6.
The SPX closed up 41 points to 5595 just below 5600. Last week’s sell-off lost 240 points. This week’s rally has recovered 187 points. This week’s rally has recovered 77% of last week’s sell-off.
On the NASDAQ the index closed up 174 points to end the day at 17,569. Last week the index lost 1022 points. This week the index has recovered 878 points or 85% of the sell-off.
It’s been an incredible rally back from last week’s plunge.
Let’s review the closing technical indicators from Thu Sep 12 2024 to see if the rally can continue into Friday.
Stock Market Outlook: SPX Closing Chart For Thu Sep 12 2024
The index closed above the 21 day moving average which is bullish.
The closing candlestick has a small shadow which signals a potential for some minor dips on Friday but higher close.
The 21 day moving average is higher at 5558. This is bullish.
The 50 day moving average is higher at 5509. This is bullish.
The 100 day moving average is rising and closed at 5391 which is bullish.
The 200 day moving average is in an uptrend and closed at 5171 which is bullish.
The Lower Bollinger Band is above the 100 day moving average and climbing which is bullish.
The Upper Bollinger Band is turned lower. This is bearish.
The chance of a Bollinger Bands Squeeze by next week is high. It’s anyone’s guess which way stocks will head out of the squeeze but at present the daily candlesticks are following the Lower Bollinger Band higher. Often that signals a higher move coming or at the very least, a move higher into next week’s Fed interest rate announcement.
The S&P chart is bullish for Friday with a chance for some dips.
SPX Stock Market Outlook review of Thu Sep 12 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is rising and negative.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thu Sep 5 2024. The down signal lost more strength on Thursday and could turn into an up signal by Friday’s close.
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Ultimate Oscillator: The Ultimate Oscillator is rising and positive.
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Slow Stochastic: The Slow Stochastic has an up signal in place.
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Relative Strength Index: The RSI signal is rising and positive.
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Rate of Change: The rate of change signal is rising signaling Friday will end lower.
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Stock Market Outlook: Support and Resistance Levels |
| 5650 is resistance |
| 5625 is resistance |
| 5615 is resistance |
| 5600 is resistance |
| 5575 is resistance |
| 5550 is resistance |
| 5540 is resistance |
| 5525 is support |
| 5500 is support |
| 5470 is support |
| 5450 is support |
| 5425 is support |
| 5400 is support |
| 5375 is support |
| 5350 is support |
| 5325 is support |
| 5300 is support |
Stock Market Outlook for Fri Sep 13 2024
For Friday there are no major economic reports that will impact stocks. The technical indicators are strongly bullish and pointing to a further day of gains. Earnings from Adobe could have a bit of negaive impact on Friday but the stock is not widely held so its expected decline should not be a concern for other tech names.
The technical indicators also show that the rally is not overbought. None of the technical indicators are signaling overbought which means there is still room for stocks to move higher. After four straight days of rallying, it would not be unusual for Friday to end flat to lower but the technical indicators advise that dips, especially in the morning are opportunities to setup trades as the close should be higher. Only the Rate Of Change is advising that Friday will end lower.
Potential Economic and Political Market Moving Events
Monday:
10:00 Wholesale inventories were expected to rise slightly to 0.3%but fell to 0.2%
3:00 Consumer credit rose to $25.5 billion from $5.2 billion.
Tuesday:
6:00 AM NFIB optimism index was expected to come in at 98.6, but came in at 91.2 showing a decline in optimism.
Wednesday:
8:30: Consumer Price Index came in as estimated at 0.2%
8:30 CPI year-over-year came in lower than estimated at 2.5%
8:30 Core CPI rose more than estimated to 0.3%
8:30 Core CPI year-over-year was unchanged at 3.2%
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims are estimated at 225,000
8:30 Producer Price Index is expected to rise slightly to 0.2%
8:30 Core PPI is estimated to drop slightly to 0.2%
8:30 PPI year-over-year is estimated to drop to 2.1%
Friday:
8:30 Import price index is expected to slip to -0.2% from 0.1%
10:00 Consumer sentiment for Sep is expected to rise to 68.4 from 67.9