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Stock Market Outlook for Thu Jan 16 2025 – Higher Still

Jan 16, 2025 | Stock Market Outlook

Stock Market Outlook Higher StillPrior Trading Day Summary:

On Wednesday everything fell into place as the oversold market staged a strong rally as bond yields dipped on the back of slightly weaker core CPI numbers and exceptional earnings from the first round of bank earnings, released before the open on Monday. By the close markets had laid to rest the recent weakness in the markets.

The SPX closed up 107 points to end the day at 5950, which was support and turned to resistance last week. Volume was 4.6 billion. New highs jumped 3.5 times versus new lows. 82% of all volume was advancing and 84% of all stocks were surging higher. This was the best day for the SPX since Nov 6 and one of the strongest days in weeks.

The NASDAQ climbed 466 points, ending the day at 19511. Volume rose 100 million to 7.5 billion shares traded. New highs rose to 78 and new lows fell to 89. 76% of all volume was advancing and 75% of all stocks were rising. It was also the strongest rally since Nov 6.

Let’s review the technical indicators at the close on Wed Jan 15 2025 to see where stocks will head on Thursday.


Stock Market Outlook: SPX Closing Chart For Wed Jan 15 2025

The index rallied above the 100 day moving average and reached the 50 day and moved above the 21 day. This is bullish.

The closing candlestick is signaling that Wednesday morning could see some profit-taking but the day will end still higher.

The 21 day moving average fell back to 5939 which is bearish. It fell below the 50 day moving average Monday which is a down signal.

The 50 day moving average is rising and closed at 5958 which is bullish.

The 100 day moving average is rising and closed at 5819 which is bullish.

The 200 day moving average is rising and closed at 5587 which is bullish.

The Lower Bollinger Band is turning sideways which is neutral.. The Upper Bollinger Band is falling which is bearish.

The rally has pressured the moving averages back to recommence climbing which is bullish. The SPX chart is more bullish than bearish for Thursday.

SPX Stock Market Outlook review of Wed Jan 15 2025


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 a down signal on Tuesday Dec 10 2024 . The down signal lost a lot of strength to the downside on Wed Jan 15 2025.

  • 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 sharply and looks set to break out of the primarily sideways trend it has been in since Dec 24..

  • 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 an up signal in place is bouncing off oversold.

  • 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 bouncing off oversold.

  • 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 sharply and signaling Thursday will end 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

6100 is strong resistance
6090 is resistance
6070 is resistance
6050 is resistance
6025 is resistance
6015 is resistance
6000 is resistance
5990 is resistance
5970 is resistance
5950 is resistance
5900 is support
5890 is support
5875 is support
5850 is support
5830 is support
5800 is support
5780 is support
5725 is support
5700 is support


Stock Market Outlook for Thu Jan 16 2025 

For Thursday, Taiwan Semiconductor (TSM) released their latest quarterly earnings after midnight ET. Revenue soared 38.8% and net income jumped 57%. The strength of the earnings will drag semiconductor stocks higher on Thursday.

Further bank earnings are released on Thursday along with earnings from UnitedHealth Group (UNH). If they beat estimates such as we saw on Wednesday, stocks will move higher again. There could be some profit-taking on Thursday morning but any dips will find ready buyers as many investors sat out the rally on Wednesday but will now want to get into stocks, especially if stocks continue to climb Thursday morning.

Technical indicators have switched right around to the bullish side after Wednesday’s massive rally. Thursday will end higher.


Potential Economic and Political Market Moving Events

Monday:

2:00 Monthly US Federal budget rose to -$75 billion

Tuesday:

6:00 NFIB optimism index rose more than expected to 105.1

8:30 Producer Price Index for Dec fell to 0.2%

8:30 Core PPI surprised by staying at 0.1% and not rising

8:30 PPI year-over-year rose more than estimated to 3.3%

8:30 Core PPI year-over-year fell back to 3.3% another surprise

Wednesday:

8:30 Consumer Price Index rose to 0.4% from 0.3%

8:30 CPI year-over-year rose as estimated to 2.9% from 2.7%

8:30 Core CPI slipped to 0.2% from 0.3% prior

8:30 Core CPI year-over-year slipped to 3.2% from 3.3% prior

2:00 Fed’s Beige Book was not a concern

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are expected to rise to 210,000 from 201,000 prior

8:30 Retail sales are expected to dip to 0.5% from 0.7% prior

8:30 Import price index is estimated to dip to -0.3% from 0.1% prior

8:30 Philadelphia Fed manufacturing index is estimated to rise to -6.0 from -16.4 prior

10:00 Business inventories are estimated unchanged at 0.1%

10:00 Home Builder confidence index is estimated to slip to 45 from 46 prior

 


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