Prior Trading Day Summary:
On Wednesday investors were surprised by the strength of retail sales that rose more than expected. Treasuries rose again on Wednesday as investors anticipated any Fed rate cut would be delayed longer than expected. That put pressure on stocks ahead of the 2:00 PM release of the latest Fed Beige Book. The Fed minutes held no surprises and gave no indication rate cuts would be coming anytime soon. Markets initially reacted negatively but then tried to rally in the final hour of trading to close well off the day’s lows. As well comments from Jamie Dimon on his cautious outlook weighed on some investors although many remembered his economic hurricane comments from June 2022 which failed to occur.
Volumes were poor again on New York with just 3.9 billion shares traded and 83% of all volume was traded to the downside. The NASDAQ saw 5.3 billion shares traded with 68% of all volume to the downside and 242 new 52 week lows versus 54 new highs.
The S&P closed down 26 points to 4739 and the NASDAQ closed down 88 points to 14,855.
Let’s review Wed Jan 17 2024 closing technical indicators to see what to expect for Thu Jan 18 2024.
Stock Market Outlook: SPX Closing Chart For Wed Jan 17 2024
The index closed below the 21 day moving average which is bearish.
The 21 day moving average is moving sideways which is bearish.
The closing candlestick is bearish for Thursday but also is signaling there is a good chance stocks will try a bounce on Thursday.
The 50 day moving average is above the 100 day and still climbing which is bullish.
The 100 and 200 day moving averages are climbing which is bullish. The 200 day is moving above the 4400 on the SPX which is bullish.
The Bollinger Bands Squeeze is well underway with the Lower Bollinger Band turning lower. Signals to the downside out of the Bollinger Bands Squeeze are continuing to dominate.
The S&P chart is more bearish than bullish for Thursday.
Stock Market Outlook review of Wed Jan 17 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is unchanged and slightly negative.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tue Jan 2. The down signal gained some strength on Wednesday.
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Ultimate Oscillator: The Ultimate Oscillator is falling but still positive.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is pulling back from overbought.
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Relative Strength Index: The RSI signal is falling sharply and negative.
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Rate of Change: The rate of change signal is falling and just clinging to positive. It is signaling the index will move lower on Thursday.
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Stock Market Outlook: Support and Resistance Levels |
| 4815 is resistance |
| 4800 is resistance |
| 4780 is resistance |
| 4750 is resistance |
| 4720 is resistance |
| 4700 is resistance |
| 4675 is support |
| 4650 is support |
| 4625 is support |
| 4600 is support |
| 4590 is support |
| 4575 is light support |
| 4565 is light support |
| 4550 is support |
| 4535 is support |
| 4520 is support |
| 4500 is support |
Stock Market Outlook for Thu Jan 18 2024
On Thursday investors get the latest jobless claims. If they reach estimates of around 208,000 it will assist the bulls. Investors also get housing starts and building permits although neither is expected to affect market direction although builders like KB Home Stock (KBH), Lennar Corp Stock (LEN) and Toll Brothers Stock (TOL) may be affected.
Discover Financial Stock (DFS) fell after hours on Wednesday after releasing disappointing earnings results. This may weigh on VISA Stock (V) and MasterCard Stock (MA) on Thursday.
Charles Schwab Stock (SCHW) also sunk on disappointing earnings and that could put further pressure on stocks like Morgan Stanley Stock (MS) and Bank Of America Stock (BAC) on Thursday.
For Thursday the technical indicators are continuing to show weakness. The closing candlestick however is pointing to a potential bounce on Thursday. The other indicators though are advising that stocks will close lower again even if there is a bounce.
Potential Economic and Political Market Moving Events
The main economic reports this week are on retail sales on Wednesday along with the latest Fed Beige Book. Friday is consumer sentiment. More banks earnings arrive this week.
Tuesday:
8:30 Empire state manufacturing survey was expected to rise to -4.0 from -14.5 previously but instead fell to -43.7 which spooked investors on Tuesday.
Wednesday:
8:30 Important price index was expected to come in at -0.6% but came in at 0.0%
8:30 Retail sales were expected to rise to 0.4% from 0.3% but rose 0.6% surprising investors.
9:15 industrial production was expected to fall to -0.1% from 0.0%. Instead it came in at 0.1%
9:15 capacity utilization was expected to slip to 78.6% from 78.8% and met estimates.
10:00 Business inventories were expected to fall to -0.1% from 0.2%. They fell as expected.
10:00 Home builder confidence index was expected to rise to 39 from 37. Instead it rose to 44.
2:00 Fed Beige Book is released with no indication of early rate cuts or any rate cuts
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims are expected to rise to 208,000
8:30 Housing starts are expected to fall to 1.43 million
8:30 building permits are expected to rise to 1.48 million.