Stock Market Outlook For Thu Jun 15 2023 – Overbought Dips Likely But Bullish

Day’s Summary

On Wednesday the Fed announced a rate pause but remained aggressive with the possibility of further rate hikes if inflation does not pullback. At the initial announcement stocks fell deepest but then buyers jumped into many of the stocks that had pulled back. By the close most investors seemed to be of the opinion that the Fed really could not raise rates again.

Intraday the S&P reached 4391 another new 52 week intraday high. The close saw the index up 3  points to 4372.

The NASDAQ rose 53 points to end the day at 13,626. Intraday the NASDAQ made another new 52 week high of 13,661.

Volumes on Wednesday were quite good with the S&P trading 4.3 billion shares and the NASDAQ 5.9 billion, the highest since May 31.

Let’s review the SPX closing technical indicators from Wed Jun 14 2023 to see what to expect for Thu Jun 15 2023.

Stock Market Outlook: SPX Closing Chart For Wed Jun 14 2023

The index held the Upper Bollinger Band with another new 52 week high which is bullish.

The closing candlestick is bearish and a warning that Thursday or Friday could end lower as the index is overbought.

All major moving averages continue to climb and the Lower Bollinger Band is falling while the 200 day is climbing. Both are bullish. The Lower Bollinger Band appears ready to fall below the 200 day, another bullish signal.

The S&P chart is solidly bullish but continues to warn that the market is overbought. There are no down signals in the chart.

Stock Market Outlook review of Wed Jun 14 2023

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Thu Jun 15 2023 

The technical indicators are still bullish for Thursday but there are signals advising the index is overbought and will pause or dip. Following yesterday’s Fed interest rate announcement, investors should expect a potential for a higher open, a sharp spike up and then a dip lower. The early afternoon could see another rally attempt but the close will be lower, even slightly, as the index digests the overbought condition as well as the Fed’s news conference.  The markets though are very bullish. The problem is there are many investors who are not into the market and want in. That means the index could stay overbought longer and could still try to punch its way higher. 4400 is likely either Thursday or Friday but it will mean the index is even more overbought. This also means there is no need to chase stocks higher at this stage of the rally. Instead waiting for dips will afford better entry prices.

Potential Economic and Political Market Moving Events

Lots of reports on Thursday to be aware of.

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are expected to come in at 245,000

8:30 US Retail sale are expected to fall to -0.2%

8:30 Retail sales non-autos are expected to be flat at 0.0%

8:30 Import price index is expected to fall to -0.5%

8:30 Empire State manufacturing survey is expected to rise to -16.0 from -31.8

8:30 Philadelphia Fed manufacturing survey is expected to fall to -14.8 from -10.0

9:15 Industrial Production is expected to be flat at 0.0%

9:15 Capacity Utilization is expected to slip slightly to 79.6% from 79.7%

10:00 Business Inventories are expected to rise to 0.2% up from -0.1%