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Stock Market Outlook for Thu Feb 15 2024 – Choppy – Dips Likely But Higher

Feb 15, 2024 | Stock Market Outlook

Stock Market Outlook Choppy Dips Likely HigherPrior Trading Day Summary:

On Wednesday investors returned to buy back many of the same stocks they were dumping on Tuesday. By the close the SPX was up 47 points for a bounce of 69%. Volume slipped back to 3.9 billion shares traded bat 78% of all volume was to the upside and 75% of all stocks were rising. The SPX closed back at 5000 which was impressive.

The NASDAQ gained 203 points for a 70% bounce. Volume slipped to 5.3 billion shares traded with 80% of all volume being traded higher versus 81% yesterday being traded lower. 73% of all stocks were rising versus 78% yesterday falling. The NASDAQ closed at 15,859.

You can see from the stats that Wednesday’s bounce was much stronger than a typical sell-off bounce.

Let’s review Wednesday’s rebound technical indicators to see what to expect for Thu Feb 15 2024.


Stock Market Outlook: SPX Closing Chart For Wed Feb 14 2024

The index rose well above the 21 day moving average. It closed below the Upper Bollinger Band at the 5000 valuation. This is bullish.

The closing candlestick is bullish for Thursday but also had a long shadow (tail) which indicates chance of a dip of some size on Thursday but still bullish.

The 21 day moving average is moving higher which is bullish. It is near 4915 on the SPX.

The 50 day moving average is rising and nearing 4800 which is bullish.

The 100 and 200 day moving averages are climbing which is bullish. The 200 day is at 4500 on the SPX which is bullish.

The Lower Bollinger Band is rising awhich is bullish but the Upper Bollinger Band is turned back up which is bullish.

The S&P chart is still more bullish than bearish for Thursday despite the closing candlestick.

Stock Market Outlook review of Wed Feb 14 2024


Stock Market Outlook: Technical Indicators Review

Momentum: Momentum is rising 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 Tue Jan 23 2024. On Wed Feb 14 2024 the up signal is almost gone.

  • 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 down 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 rising and positive.

  • 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 rising and signaling Thursday should be higher.

  • 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

5050 is resistance
5025 is resistance
5010 is resistance
5000 is resistance
4990 is resistance
4975 is resistance
4950 is resistance
4925 is resistance
4915 is resistance
4900 is resistance
4875 is resistance
4850 is support
4825 is support
4815 is support
4800 is support
4780 is support
4750 is support
4720 is support
4700 is support
4675 is support
4650 is support


Stock Market Outlook for Thu Feb 15 2024 

Wednesday’s bounce in equities was much stronger than a typical bounce after a sell-off. However the technical indicators are mixed. Even those that have changed from falling to rising are not rising strongly despite Wednesday’s rally. Part of the reason is because a lot of the push back to 5000 was in the final two hours of trading. As well, the Dow Jones Index lost 525 points on Tuesday but gained just 151 points on Wednesday. This too warns to stay cautious as the Dow bounce recovered just 28% of Wednesday’s losses.

For Thursday then the signals are advising caution. Even with some excellent earnings being reported this quarter investors need to ask what will continue to push stocks higher.

Dips are expected on Thursday, which could be deeper than anticipated. The close still looks positive but a close below 5000 is a strong possibility.

On Thursday there are a number of economic reports that might affect stocks. The list is below.


Potential Economic and Political Market Moving Events

Inflation on Tuesday with CPI reports and on Thursday a myriad of economic reports will have the most impact this week.

Monday:

No reports that will impact stocks

Tuesday:

8:30 Consumer prince index is expected to drop to 0.2% from 0.3% but instead stayed at 0.3%

8:30 Core CPI is expected to be unchanged at 0.3% and came in as expected.

8:30 CPI year-over-year is expected to have fallen to 2.9% from 3.4% but instead fell to 3.1%

8:30 Core CPI year-over-year is estimated to have fallen to 3.7% from 3.9% but instead stayed at 3.9%

Wednesday:

Two Fed Officials speak but there are no economic reports that will impact stocks.

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are expected to rise to 220,000

8:30 Empire State manufacturing survey is expected to rise to -12.5 from -43.7

8:30 Philadelphia Fed manufacturing survey is expected to rise to -9.0 from -10.6

8:30 Import Price Index is expected to dip to -0.1% from 0.0%

8:30 Retail sales are estimated to fall to -0.2% from 0.6%

9:15 Industrial production is estimated to rise to 0.2% from 0.1%

10:00 Home Builder confidence index is estimates to rise slightly to 46 from 44






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