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Stock Market Outlook for Mon Jun 17 2024 – Weakness – Lower Day But Still Bullish

Jun 16, 2024 | Stock Market Outlook

Stock Market Outlook

Prior Trading Day Summary:

On Friday the SPX had a flat day, losing just 2 points to close at 5431. However 75% of all volume was being traded lower and 66% of all stocks on the index were falling.

The NASDAQ squeezed out a small gain of 21 points to close at 17688 another new closing high. Just as we saw on the SPX, volume was heavily negative with 57% of all traded to the downside and 67% of all stocks falling.

Friday was the second day of weakness on the indexes but for the week, the S&P closed up 84 points, the best weekly gain since the first week of May. The NASDAQ rose 555 points for the best weekly gain since the fourth week of April.

Let review the closing technical signals from Fri Jun 14 2024 to see what to expect for Mon Jun 17 2024.


Stock Market Outlook: SPX Closing Chart For Fri Jun 14 2024

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

The closing candlestick is neutral and indicates a dip is likely on Monday with a potential lower close.

The 21 day moving average is still climbing continuing the latest up signal.

The 50 day moving average is climbing which is bullish.

The 200 day moving average is still climbing. The 200 day is at 4897 which is bullish and the 100 day is also climbing to 5116.

The Lower Bollinger Band is above the 50 day moving average but will probably fall below it shortly. The Upper Bollinger Band is turned higher. Both are starting to signal an end to the latest Bollinger Bands Squeeze.

The S&P chart is bullish but the closing candlestick is warning of dips and a possible lower close on Monday.

SPX Stock Market Outlook review of Fri Jun 14 2024 – chart courtesy TradingView


Stock Market Outlook: Technical Indicators Review

Momentum: Momentum is falling and positive.

  • Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thu Jun 6 2024. On Fri Jun 14 2024 the up signal was stronger. The MACD histogram gained strength.

  • Settings: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9. 
Ultimate Oscillator: The Ultimate Oscillator is rising and positive.

  • Settings: The Ultimate Oscillator settings are: Period 1 is 5, Period 2 is 10, Period 3 is 15, Factor 1 is 4, Factor 2 is 2 and Factor 3 is 1. These are not the default settings but are the settings I use with the S&P 500 chart set for 1 to 3 months.
Slow Stochastic: The Slow Stochastic has a neutral signal in place and is overbought.

  • Settings: For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic tries to predict the market direction further out than just one day.
Relative Strength Index: The RSI signal is falling and overbought.

  • Settings: The relative strength index is set for a period of 5 which gives it 5 days of market movement to monitor.  It is often the first indicator to show an overbought or oversold signal.
Rate of Change: The rate of change signal is falling signaling that Monday will end lower.

  • Settings: Rate Of Change is set for a 21 period. This indicator looks back 21 days and compares price action from the past to the present. With the Rate Of Change, prices are rising when signals are positive. Conversely, prices are falling when signals are negative. As an advance rises, the Rate Of Change signal should also rise higher, otherwise the rally is suspect. A decline should see the Rate Of Change fall into negative signals. The more negative the signals the stronger the decline.

Stock Market Outlook: Support and Resistance Levels

5465 is resistance
5450 is resistance
5425 is resistance
5400 is resistance
5375 is resistance
5350 is resistance
5325 is resistance
5310 is resistance
5300 is resistance
5275 is resistance
5250 is light support
5225 is light support
5200 is good support
5190 is light support
5175 is light support
5150 is support
5125 is support
5115 is support
5100 is support


Stock Market Outlook for Mon Jun 17 2024 

For Monday the rally looks set to pause, at least in the morning, as stocks are overbought and the technical indicators are showing more weakness.

Wednesday this week is a holiday marking Juneteenth. Stocks may turn sideways heading into the holiday and then pick up some strength after Wednesday but for Monday signals are warning of dips as the majority of stocks and trading volume has turned decidedly negative as of late last week.


Potential Economic and Political Market Moving Events

The biggest economic events this week are retail sales on Tuesday and PMI numbers on Friday.

Monday:

8:30 Empire State manufacturing survey is expected to rise to -10.5 from -15.6 prior






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