Stock Market Outlook for Fri Sep 20 2024 – Overbought – Dips Like But Bullish

Prior Trading Day Summary:

On Thursday investors jumped into stocks as they embraced the start of what most expect will be a string of interest rate cuts by the Fed. Stocks soared higher in a broad-based rally on good volume

The SPX rose 95 points for the best day since August 8. Volume rose 400 million shares to 4.1 billion. There were 416 new 52 week highs and just 7 new lows. 77% of all stocks were rising. The index closed at a new high of 5,713.

The NASDAQ saw 5.7 billion shares traded, matching Wednesday’s volume. The rally added a massive 440 points for the best day since August 8. 72% of all stocks were rising with 406 new 52 week highs but 95 new 62 week lows, more than the 74 we saw on Wednesday. The NASDAQ ended the day at 18,013.  This was not a new high for the index but it is within 572 points on the old high.

Let’s review the closing technical indicators from Thu Sep 19 2024 to see what to expect on Fri Sep 20 2024.

Stock Market Outlook: SPX Closing Chart For Thu Sep 19 2024.

The index closed above the 21 day moving average and at the Upper Bollinger Band which is bullish.

The closing candlestick has two short shadows (head and tail) which indicates overbought but bullish.

The 21 day moving average is higher at 5581. This is bullish.

The 50 day moving average is higher at 5516. This is bullish.

The 100 day moving average is rising and closed at 5415 which is bullish.

The 200 day moving average is in an uptrend and closed at 5194 which is bullish.

The Lower Bollinger Band is above the 100 day moving average and falling which is bullish.

The Upper Bollinger Band is turning higher which is bullish. The Bollinger Bands Squeeze appears set to end with stocks moving higher.

The S&P chart is more bullish than bearish for Friday.

SPX Stock Market Outlook review of Thu Sep 19 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Fri Sep 20 2024 

On Thursday the Weekly Initial Unemployment Insurance Claims came in lower than expected at 219,000 but the number was still high enough to indicate no recession yet. This helped stocks rise on Thursday. As well the Philadelphia Fed manufacturing survey was a lot higher than expected at 1.7 from a -7.0 prior. New home sales fell lower than expected to 3.86 million but leading economic indicators while still negative at -0.2% were much higher than expected and the prior -0.6%. On Thursday the economic indicators basically supported the Fed’s decision to cut interest rates and despite talk of recession, none of the numbers were a concern.

For Friday many stocks are overbought and dips are likely. Dips though are opportunities to setup trades as the outlook remains bullish and a higher close is still likely.

Potential Economic and Political Market Moving Events

Monday:

8:30 Empire State manufacturing survey came in much higher than expected at 11.5 versus -4.7 prior.

Tuesday:

8:30 Retail sales rose 0.1% surprising analysts

8:30 Retail sales minute autos slipped further than estimated to 0.1%

9:15 Industrial production rose to 0.8% which was higher than estimates of 0.2%

9:15 Capacity utilization was slightly higher at 78.0%

10:00 Business inventories rose to 0.4%

10:00 Home builder confidence rose to 41 from 39

Wednesday:

8:30 Housing starts for August rose to 1.36 million, well beyond estimates of 1.31 million

8:30 Building permits for August rose to 1.48 million, well ahead of estimates of 1.41 million

2:00 FOMC interest-rate decision announced a half point rate cut

2:30 Fed Chair Powell news conference

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims came is lower at 219,000

8:30 Philadelphia Fed manufacturing survey came in stronger at 1.7

10:00 Existing home sales fell further than expected to 3.86 million

10:00 Leading economic indicators rose higher at -0.2%

Friday:

No reports