Prior Trading Day Summary
On Thursday investors decided to take profits as they worried that interest rates will stay higher, longer. Some analysts predicted high interest rates through all of 2024 and into 2025 before reductions. With a Presidential Election in 2024, I think we could see rate cuts before the election but that’s just my opinion. As well with the UAW strike continuing, oil prices rising, investors pulled the plug on equities.
The SPX fell 72 points but on low volume of 3.7 billion. Added to Wednesday’s sell-off and the SPX has lost 113 points in two days. Obviously markets are oversold. The SPX ended the day at 4330.
The NASDAQ lost 245 points on 5.1 billion shares traded to close at 13,224. Over the past two days the index has lost 454 points. Many stocks on the NASDAQ are also very oversold.
Let’s review the closing technical indicators from Thu Sep 21 2023 to see what to expect for the final trading day of the week, Fri Sep 22 2023.
Stock Market Outlook: SPX Closing Chart For Thu Sep 21 2023
The index closed below the 50 and 21 period and 100 period moving averages which is bearish. The closing candlestick is bearish but also signals very oversold and a bounce is likely.
The 50 period and 21 period moving averages are falling which is bearish. The 100 and 200 period moving averages are continuing to climb.
The Lower Bollinger Band is falling which is bullish. The Upper Bollinger Band is rising which is also bullish and may signal the Bollinger Bands Squeeze is ending.
Stock Market Outlook review for Thu Sep 21 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling sharply and negative. It is signaling overold.
|
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Mon Sep 18. On Thursday the down signal is much stronger.
|
Ultimate Oscillator: The Ultimate Oscillator is falling and negative. It is oversold.
|
Slow Stochastic: The Slow Stochastic has a down signal in place and is oversold.
|
Relative Strength Index: The RSI signal is falling and negative. It is oversold.
|
Rate of Change: The rate of change signal is falling and negative.
|
Stock Market Outlook: Support and Resistance Levels |
| 4600 is resistance |
| 4575 is resistance |
| 4550 is resistance |
| 4525 is resistance |
| 4500 is resistance |
| 4485 is resistance |
| 4470 is resistance |
| 4450 is support |
| 4435 is support |
| 4420 is support |
| 4400 is support |
| 4390 is support |
| 4370 is support |
| 4350 is support |
| 4330 is support |
| 4325 is support |
| 4300 is good support |
Stock Market Outlook for Fri Sep 22 2023
This is not the first Fed induced plunge in equities and it certainly won’t be the last. You can see in the Support/Resistance chart that the SPX is sitting at the 4330 support level. The past two days quickly plunged below 4450. It will take a number of days before those support levels will turn into resistance. With stocks oversold and investors dumping shares on Thursday, especially in the afternoon and into the close, Friday should see a bounce in the morning, but the outlook is still for more selling before investors tire and buyers return.
Potential Economic and Political Market Moving Events
This week the Fed’s interest rate decision and news conference on Wednesday were the main events to be watching.
Friday:
Both of these reports are expected to show stronger numbers which will be bearish for those investors looking for a Fed rate cut
9:45 S&P flash services PMI
9:45 S&P flash manufacturing PMI