Stock Market Outlook for Mon Dec 30 2024 – Looking For Santa Claus Rally

Prior Trading Day Summary:

Friday was a low volume day on the S&P but not on the NASDAQ where 8 billion shares were traded. Whether the day was primarily profit-taking or computerized trading as the market dipped lower, the close saw the S&P down 66 points to $5970 and the NASDAQ down 298 points to 19,722.

Despite the high volume on the NASDAQ 51% of all volume was to the upside but 71% of all stocks were falling. This indicates that volume being traded higher was more concentrated in specific stocks while the broader NASDAQ fell.

On The S&P 75% of all volume was traded lower and 80% of all stocks were falling.

Some of the drop on Friday had to do with computerized trading where specific price points were reached and stocks were sold out. As the market fell, volume increased but the retreat was fairly orderly, another hint that much of the trading was automated.

This week will give us a better idea whether the Santa Claus Rally will restart.

Let’s review the technical indicators at the close on Fri Dec 27 2024 to see what to expect for Mon Dec 30 2024

Stock Market Outlook: SPX Closing Chart For Fri Dec 27 2024

The index closed below the 21 day moving average after reaching the 50 day and bouncing off it intraday. Overall this is bearish.

The closing candlestick shows a long shadow . Often this shadows signals a bounce coming today. Overall though the candlestick is bearish.

The 21 day moving average fell back 70 6022 which is bearish.

The 50 day moving average is higher at 5940 which is bullish.

The 100 day moving average is rising and closed at 5800 which is bullish.

The 200 day moving average is in an uptrend and closed at 5550 which is bullish.

The Lower Bollinger Band is below the 50 day and moving lower which is bearish. The Upper Bollinger Band is trending sideways which is neutral.

The S&P chart is almost split between bullish and bearish signal although the lower 21 day is a signal to watch.

SPX Stock Market Outlook review of Fri Dec 27 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Mon Dec 30 2024 

If you look at the support / resistance chart above you can see that 5970 is a resistance level and 5950 is support. On Friday the market closed right at the 5970 level. Today I would expect the SPX to dip down to 5950 and then attempt a bounce.

The technical indicators are decidedly negative but there are still a few that are signaling almost a wait and see outlook for today. In particular the MACD indicator did not gain much strength to the downside but instead matched Thursday’s signal. It is giving investors a “wait and see” signal for Monday.

We have seen these types of events in Santa Claus Rallies before, especially when markets are sitting at all-time highs which they are presently. Monday could end up being lower again but we could still see Santa Claus come to the rescue, only from a lower valuation.

Potential Economic and Political Market Moving Events

Monday:

9:45 Chicago business barometer (PMI) is expected to rise to 42.2 from 40.2 prior

10:00 Pending home sales are expected to fall to 0.7% from 2.0% prior