Stock Market Outlook for Thu Feb 6 2025 – Choppy Dips Possible But Still Up

Prior Trading Day Summary:

On Wednesday stocks had a choppy day but kept a bullish bias. By the close the majority of the SPX and NASDAQ were moving higher despite a plunge in Alphabet Stock (GOOGL) and Advanced Micro Devices Stock (AMD).

The SPX rose 23 points to close at 6061. The NASDAQ rose 38 points to end the day at 19,692. Both indexes had small gains on Wednesday but on the SPX 69% of all stocks were rising and 66% of all stocks on the NASDAQ were climbing as well.

With the SPX and NASDAQ both holding bullish biases, let’s review the technical indicators at the close on Wed Feb 5 2025 to see what to expect for Thu Feb 6 2025.

Stock Market Outlook: SPX Closing Chart For Thu Feb 6 2025

The index closed above the 50 and 21 day moving averages. This is bullish.

The closing candlestick has a slight shadow which indicates dips will occur on Thursday but overall the candlestick is bullish.

The 21 day moving average is rising and closed at 5993 and it is now at the 50 day moving average. A close above it, will be another bullish signal.

The 50 day moving average is rising and closed at 5997 which is bullish.

The 100 day moving average is rising and closed at 5874 which is bullish.

The 200 day moving average is rising and closed at 5647 which is bullish.

The Lower Bollinger Band is rising which is bullish at present. The Upper Bollinger Band is also rising which is bullish.

For Thursday the SPX chart is more bullish than bearish aside from the closing candlestick which is warning of dips for today.

SPX Stock Market Outlook review of Wed Feb 5 2025

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Thu Feb 6 2025 

At the close on Wednesday the 5970 valuation in the chart above reverse to a support level. If the SPX continues higher, we will see the 5990 valuation also change to support.

On Wednesday the economic reports showed more strength than analysts had expected, especially with employment as the ADP employment report jumped to 183,000 instead of a decline to 150,000. Some analysts saw this as a potential sign the economy is picking up steam which could be construed as inflationary, but bonds did not change on Wedneday to reflect this.

As well, while investors started the day selling out of Alphabet Stock (GOOGL) and Advanced Micro Devices Stock (AMD) after their earnings report on Wednesday after the close, by the lunch hour many investors were ignoring the selling and focusing instead on other stocks. This helped the indexes to climb and end the day slightly positive. It also meant that the MACD down signal did not occur. Instead the MACD signal remains positive.

For Thursday I am expecting a higher day ahead of the January non-farm payroll report which is released tomorrow at 8:30.

Potential Economic and Political Market Moving Events

Monday:

9:45 S&P final manufacturing PMI for 2024 came in higher than estimated at 31.2

10:00 Construction spendin was higher than estimated at 0.5%

10:00 ISM manufacturing was higher than estimated at 50.9%

Intraday: Autosales were lower than estimated at 16.8 million vehicles

Tuesday:

10:00 Job openings fell more than expected to 7.6 million from 8.2 million

10:00 Factory orders fell more than estimated to -0.9%

Wednesday:

8:15 ADP employment jumped ahead of estimated and rose to 183,000

8:30 Trade deficit jumped to $98.4 billion for December

9:45 S&P final services PMI for January rose to 52.9 as expected

10:00 ISM services fell more than estimated to 52.8% for January.

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are estimated to rise to 214,000 from 207,000 last week.

8:30 Productivity is estimated to dip to 1.4% from 2.2% prior