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Stock Market Outlook for Mon Jun 24 2024 – Potential Bounce But Lower

Jun 23, 2024 | Stock Market Outlook

Potential Bounce But Lower

Prior Trading Day Summary:

Friday was triple witching with options expiring and volumes spiking higher on both New York and the NASDAQ.

The S&P saw 7.2 billion shares traded while the NASDAQ had 9.2 billion shares change hands.

Both indexes moved slightly lower with the S&P down 8 points to 5464 and the NASDAQ down 32.

The S&P was still up for the week adding in another 33 points which the NASDAQ was virtually flat, ahead by just 0.47.

As we enter the final week of June, many analysts are calling for a pullback as NVIDIA Stock (NVDA) slipped again on Friday. Analysts pointed to the selling as a signal the market may have topped for now. Personally I can see a bit of weakness but  I see no sign yet of a actual correction. Analysts have called for a correction for weeks. At some point they will be right but I prefer to look at the technical signals each day at the close. To that end let’s review Fri Jun 21 to see what the start of the final week of June may look like.


Stock Market Outlook: SPX Closing Chart For Fri Jun 21 2024

The index closed above the 21 day moving average and below the Upper Bollinger Band. This is bullish but with cautionary signals.

The closing candlestick is bearish for Monday and indicates stocks could attempt a bounce but will close lower again.

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 4919 which is bullish and the 100 day is also climbing to 5143.

The Lower Bollinger Band is below the 50 day moving average and the Upper Bollinger Band is rising. This is bullish but note that the Lower Bollinger Band is turning sideways on Friday which needs to be watched for any change in the trend.

The S&P chart is bullish for Monday. It is signaling a good chance for a bounce which will be followed by a lower close.

SPX Stock Market Outlook review of Fri Jun 21 2024


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 21 2024 the up signal was weaker. The MACD histogram lost some strength. You can see in the chart that the move lower in strength is steady for a second straight day.

  • 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 falling 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.

  • 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

5500 is resistance
5490 is resistance
5475 is resistance
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 support
5275 is support
5250 is light support
5225 is light support
5200 is good support
5190 is light support


Stock Market Outlook for Mon Jun 24 2024 

For Monday the SPX should see an attempt to bounce higher but the outlook is still lower into the close.

Once NVIDIA Stock (NVDA) stops falling, stocks will recover their move higher. That though seems unlikely by the close on Monday.

For the final week of June, there are a number of economci events that will impact stocks. These include Durable Goods on Thursday and PCE numbers on Friday. The PCE numbers are the more important reports and could push stocks higher or lower, depending on their numbers.

There are also some big cap stocks reporting earnings this week which could impact stocks. These include Carnival Corp (CCL), FedEx (FDX), General Mills (GIS), Paychex (PAYX), Micron Technology (MU), Levi Straus (LEVI) , Walgreens Boots Alliance (WBA), McCormick & Co (MKC) and Nike (NKE). The final week of June promises to be exciting, busy and probably volatile. This will be a very profitable week for my portfolios.


Potential Economic and Political Market Moving Events

The biggest economic events this week are Durable Goods on Thursday and PCE numbers on Friday.

Monday:

No economic reports but 3 Fed officials are speaking today.






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