Prior Trading Day Summary:
Thursday started off strong with the SPX hitting 5767, a new high but then investors once again ran into sellers. This time volumes rose higher with the SPX reaching 4.5 billion by the close and the NASDAQ seeing 5.8 billion shares traded. Both indexes closed higher but the initial height of the SPX was not recovered. This impact some of the technical indicators that are advising caution ahead of the PCE index numbers due out on Friday.
The SPX closed up 23 points to 5745, another new closing higher.
The NASDAQ rose 108 points matching Tuesday’s rally and extending the NASDAQ rally into a fourth day. It closed at 18,190.
The NASDAQ traded 5.0 billion shares a decrease of 500 million shares, to close up 7 points to 18,082.
After hours Costco reported earnings of $5.15 a share on revenue of $79.70 billion. This was well above last year’s $4.86 a share on revenue of $78.90 billion. The stock was lower after hours but I think that will reverse once the stock begins trading on Friday.
Let’s review the closing technical indicators from Thu Sep 26 2024 to see what to expect on Fri Sep 27 2024.
Stock Market Outlook: SPX Closing Chart For Thu Sep 26 2024
The index closed above the 21 day moving average and at the Upper Bollinger Band which is bullish.
The closing candlestick has two shadows (head and tail). The head is shorter which indicates buyers were still buying into the close. The tail shadow indicates sellers which often signals some weakness building.
The 21 day moving average is higher at 5607. This is bullish.
The 50 day moving average is higher at 5526. This is bullish.
The 100 day moving average is rising and closed at 5444 which is bullish.
The 200 day moving average is in an uptrend and closed at 5219 which is bullish.
The Lower Bollinger Band is below the 100 day moving average which is bullish.
The Upper Bollinger Band is rising which is bullish.
The S&P chart is more bullish than bearish for Friday with just the closing candlestick warning.
SPX Stock Market Outlook review of Thu Sep 26 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and positive for a second day.
|
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Fri Sep 13 2024. The up signal was weaker again on Thursday.
|
Ultimate Oscillator: The Ultimate Oscillator is falling and positive.
|
Slow Stochastic: The Slow Stochastic has a very weak up signal and is at overbought levels. A down signal may occur tomorrow.
|
Relative Strength Index: The RSI signal is rising and positive. It is at overbought levels.
|
Rate of Change: The rate of change signal is rising which advises Friday will end higher.
|
Stock Market Outlook: Support and Resistance Levels |
| 5750 is resistance |
| 5740 is resistance |
| 5715 is resistance |
| 5700 is resistance |
| 5650 is resistance |
| 5625 is resistance |
| 5615 is resistance |
| 5600 is resistance |
| 5575 is resistance |
| 5550 is light support |
| 5525 is support |
| 5500 is support |
| 5470 is support |
| 5450 is support |
| 5425 is support |
| 5400 is support |
Stock Market Outlook for Fri Sep 27 2024
Some of the opening bounce on Thursday came about from the Chinese stimulus measures announced which rallied markets. Our markets responded in kind at the open, despite Weekly Initial Unemployment Insurance Claims coming in lower than expected at 218000.
The technical indicators are continuing to show weakness growing to the rally which is also reflected in the closing candlestick on the SPX today. Momentum is continuing to sag and the MACD and Slow Stochastic indicators are both losing strength to the up signal. The MACD is the more important signal to watch and it is declining in strength which is readily seen in the declining histogram.
On Friday we get the latest Personal Consumption Expenditures (PCE) numbers which are followed closely by the Fed. Personal income is expect to have risen but personal spending is estimated to have decline. The index overall is expected to be slightly lower while the core PCE is estimated to have risen slightly. If all of this holds true markets should move higher on Friday. Any large miss could see stocks open lower.
Costco reported earnings that were slightly above estimates but showed just 0.96% revenue growth year-over-year. The stock moved lower after hours on Thursday which might weigh on the open.
For Friday then the outlook is once again for a choppy day with dips but a higher close.
Potential Economic and Political Market Moving Events
Monday:
9:45 S&P flash services PMI came in as expected at 55.4
9:45 S&P flash manufacturing PMI was lower than expected at 47
Tuesday:
9:00 Case-Shiller home price index came in lower than expected at 5.9%
10:00 Consumer confidence was a lot lower than expected coming in at 98.7
Wednesday:
10:00 New homes sales rose to 716,000 which was above estimated of 700,000
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims were lower than expected at 118,000
8:30 Durable goods orders were flat at 0.0%
8:30 GDP (second revision) came in as expected at 3.0% for the quarter
10:00 Pending home sales were lower than expected at 0.6%
7 Fed officials are speaking at various times and locations throughout the day continuing to push the declining interest rate narrative. This should be bullish for stocks.
Friday:
8:30 Personal income is expected to have risen to 0.4%
8:30 Personal spending is estimated to have fallen to 0.3%
8:30 PCE Index is expected lower at 0.1%
8:30 PCE (year-over-year) is expected to have declined to 2.3% from 2.5%
8:30 Core PCE index is estimated unchanged at 0.2%
8:30 Core PCE (year-over-year) is estimated to have risen to 2.7% from 2.6%
8:30 Advanced wholesale inventories is estimated to be unchanged at 0.2%
8:30 Advance retail inventories is estimated to be unchanged at 0.8%
10:00 Sep Consumer Sentiment is estimated at 69.3, up slightly from 69.0 prior.