Prior Trading Day Summary:
On Wednesday investors got the latest FOMC minutes which basically showed that Fed officials remained more concerned about inflation than about reducing interest rates. The initial reaction was negative but from there the market climbed back and ended the day positive as investors bet on strong earnings from NVIDIA (NVDA) after hours. The company didn’t disappoint and the stock which initially sold lower after hours, but once investors saw the increase in actual revenue and the raised outlook for the next quarter the stock rose well above $700 for a 10% gain after hours. Thursday will be all about NVIDIA as after hours other semis such as AMD, Intel, TSM, Apple, Microsoft and many others saw their stocks rise as well.
The SPX rose 6 points to close at 4981 while the NASDAQ lost 50 points to close at 15,580.
Let’s review Wednesday’s closing technical indicators to see what we should expect for Thu Feb 22 2024.
Stock Market Outlook: SPX Closing Chart For Wed Feb 21 2024
The index rose on Wednesday closing above the 21 day moving average. This is bullish.
The closing candlestick is bullish for Thursday.
The 21 day moving average is moving higher which is bullish. It is at 4950 on the SPX.
The 50 day moving average is rising and at 4820 which is bullish.
The 100 and 200 day moving averages are climbing which is bullish. The 200 day is at 4520 on the SPX which is bullish.
The Bollinger Bands are now into another Bollinger Bands Squeeze but they could be signaling a move higher after NVIDIA’s earnings.
The S&P chart is still more bullish than bearish for Thursday.
Stock Market Outlook review of Wed Feb 21 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Fri Feb 16 2024. On Tue Feb 20 2024 the down signal was confirmed.
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Ultimate Oscillator: The Ultimate Oscillator is rising and positive.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is not overbought.
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Relative Strength Index: The RSI signal is rising and negative.
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Rate of Change: The rate of change signal is falling. It is signaling a lower day should be expected for Thursday but that signal was generated before NVIDIA’s earnings were known.
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Stock Market Outlook: Support and Resistance Levels |
| 5075 is resistance |
| 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 support |
| 4850 is support |
| 4825 is support |
| 4815 is support |
| 4800 is support |
| 4780 is support |
| 4750 is support |
| 4720 is support |
| 4700 is support |
Stock Market Outlook for Thu Feb 22 2024
For Thursday the technical indicator signals were from Wednesday’s close before the earnings from NVIDIA were known. With those earnings out-of-the-way, the technical indicators which are still indicating weakness will have little impact.
NVIDIA’s influence on the indexes is enormous and on Thursday as the stock rises, many other stocks will join the rally, albeit to a lesser extent but enough that this could break the down signal from the MACD indicator.
Potential Economic and Political Market Moving Events
The January FOMC minutes are out Wednesday afternoon at 2:00. On Thursday we get manufacturing PMI and existing home sales. These could move markets this week.
Monday:
Presidents Day Holiday
Tuesday:
10:00 Leading economic indicators came in as expected with a dip to -0.3% from -0.1% prior.
Wednesday:
2:00 Minutes of Fed’s January FOMC meeting are released
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims are expected to rise to 216,000
9:45 S&P flash services PMI is expected to be almost unchanged at 52.4
9:45 S&P flash manufacturing PMI is expected to be lower at 50.1
10:00 Existing home sales are expected to rise to 3.97 million.