Stock Market Outlook For Mon May 19 2025 – Dips Likely – Possible Lower Close But Still Bullish

Prior Trading Day Summary:

On Friday stocks continued their advance and closed up 41 points to end the day at 5958. The SPX closed at the day’s high on 4.9 billion shares traded, the lowest volume of the week. 68% of all stocks were rising on Friday. For the week, the S&P rose every day to gain 298 points for the best one week of 2025.

The NASDAQ rose 98 points on 11 million shares traded. 62% of all stocks were rising. For the week, the NASDAQ rose 1282 points. It was also the best week of 2025.

With most stocks overbought but the bulls still well in charge, let’s review the technical indicators from the close on Fri May 16 2025 to see what we should expect for Mon May 19 2025.

Stock Market Outlook: SPX Closing Chart For Fri May 16 2025

The index closed above all major moving averages and below the Upper Bollinger Band. This signals overbought. After 3 days of drifting sideways, the index moved higher on Friday.

The closing candlestick is bullish but with along shadow indicating some dips are likely, perhaps deeper than expected. Dips are still opportunities to place trades.

The 21 day moving average is rising and closed at 5608 which is bullish. On Wednesday the 21 day crossed above the 50 day, the first up signal from the 21 day moving average. This reversed the 5th down signal in the SPX chart.

The 50 day moving average is rising and closed at 5558 which is bullish. The 50 day moving average fell below the 100 day on Tue April 15 which issued a 4th down signal on the SPX.

The 100 day moving average is rising and closed at 5695 which is bullish.

The 200 day moving average is rising and closed at 5651 which is bullish.

The Lower Bollinger Band is turning higher which is bullish. The Upper Bollinger Band is rising which is bullish.

For Mon May 19 2025 the SPX chart is more bullish than bearish with continuing warnings of the market dipping being likely.

SPX Stock Market Outlook review of Fri May 16 2025

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Mon May 19 2025 

For Monday two more support levels have been added to the rally. The 5700 and 5750 valuations have moved back into support levels from being resistance during the market collapse in early April. The SPX is now pushing into the heavier resistance levels as it heads toward 6000. These have been added to the support/resistance chart above.

To start the week the technical indicators are showing the index as very overbought and due to pullback or dip at any time. Markets though can keep climbing, especially overbought markets, as investors chase a stock rally higher. On the weekend Moody’s downgraded US credit rating due to the climbing debt but basically they are finally joining the other rating agencies. Moody’s moved the ratings to AA1 from AAA. We could see a dip at the open as some nervous investors may react but overall, this was to be expected and probably long overdue. Most investors, I think, won’t be concerned. Therefore a dip on Monday morning will probably find ready buyers eager to take advantage of any stocks that fall, in particular big cap names.

For Monday I expect weakness in the morning but a flat to higher close to end the day.

Potential Economic and Political Market Moving Events

Monday:

10:00 Leading economic indicators are expected to dip to -0.9% from -0.7% prior – I am not expecting this report will have any effect on the day’s trading direction.