Prior Trading Day Summary:
On Wed May 7 2025 Fed Chair Powell discussed the Fed’s quandary of what they think could be higher inflation along with higher unemployment, “coming soon”. There is no time frame but the Fed held interest rates unchanged for another month. Many analysts expressed concern that the Fed is once more placing itself behind what is actually happening. Many felt a quarter point reduction would assist if indeed unemployment is rising, which at present does not appear to be the case. Whatever the Fed does there are always going to be some unhappy investors and analysts and Wednesday’s meeting proved this again.
However instead of falling as the Fed’s news conference go underway, the indexes rose. The SPX closed positive on the day, up 24 points on 5 billion shares traded with 60% of stocks rising. The index closed just below the 200 day moving average, ending the day at 5631.
The NASDAQ rose 48 points to end the day at 17,738 on 8.3 billion shares traded. 53% of all stocks were rising into the close.
Let’s review the technical indicators from the close on Wed May 7 2025 to see what we should expect for Thu May 8 2025..
Stock Market Outlook: SPX Closing Chart For Wed May 7 2025
The index closed above the 50 day, 21 day and at the 200 day moving average. This is bearish.
The closing candlestick is bullish although there are some long shadows. At the close the shadows pointed to the index probably moving higher on Thursday.
The 21 day moving average is rising and closed at 5433. The 21 day moving average fell below the 50 day on Friday Mar 7. It fell below the 100 day on Thursday Mar 13 for a second down signal and on Friday Mar 28 it fell below the 200 day for a third down signal.
The 50 day moving average is falling and closed at 5561 which is bearish. The 50 day moving average fell below the 100 day on Tue April 15. which issued a 4th down signal on the SPX. The 50 day on Friday fell below the 200 day for a 5th down signal.
The 100 day moving average is falling and closed at 5674 which is bearish.
The 200 day moving average is unchanged and closed at 5637 which is bearish.
Only one moving average is climbing as of Tuesday’s close. The other three moving averages are falling and one is unchanged which is bearish.
The Lower Bollinger Band is rising which is bearish. The Upper Bollinger Band is rising which is bullish.
For Thu May 8 2025 the SPX chart is more bearish than bullish.
SPX Stock Market Outlook review of Wed May 7 2025
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling but positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tue Apr 22 2025. On Wed May 7 2025 the up signal lost some strength.
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Ultimate Oscillator: The Ultimate Oscillator is falling and positive.
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Slow Stochastic: The Slow Stochastic is overbought and has a down signal at the close.
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Relative Strength Index: The RSI signal is rising and positive.
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| Rate of Change: The rate of change signal is unchanged indicating a larger move is less likely, either up or down. 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 |
| 5700 is resistance |
| 5650 is resistance |
| 5630 is resistance |
| 5600 is resistance |
| 5550 is resistance |
| 5500 is resistance |
| 5450 is resistance |
| 5400 is support |
| 5350 is support |
| 5300 is support |
| 5230 is support |
| 5000 is support |
| 4770 is support |
| 4680 is support |
| 4500 is support |
| 4365 is support |
| 4150 is support |
| 4000 is support |
Stock Market Outlook for Thu May 8 2025
For Thu May 8 2025 the SPX chart is more bearish than bullish but the rally higher on Wednesday is encouraging. The technical indicators continued to lose their bullish strength and the MACD indicator also saw its positive outlook slashed again.
The index needs to close convincingly above the 200 day moving average today or tomorrow to keep the rally alive.
On Thursday investors get the latest initial weekly unemployment report. If the number if lower than estimated at 230,000 we could see the index move above the 200 day. If the number is higher, the index will have a rough day and could close lower.
At present the technical indicators still show enough strength to expect a higher close on Thursday and above the 200 day moving average.
Potential Economic and Political Market Moving Events
Monday:
9:45 S&P final services PMI dipped to 50.8 which was lower than estimated
10:00 ISM services rose to 51.6% which was higher than estimated and the prior reading
Tuesday:
8:30 Trade Deficit was lower than estimated, coming in at -$140.5 billion
Wednesday
2:00 FOMC meeting
2:30 Fed Chair Powell news conference – Powell expressed concerns about higher inflation and higher unemployment
3:00 Consumer credit came in as estimated at $9.0 billion.
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims are estimated to fall to 230,000 from 241,000 prior
8:30 USA productivity is estimated to fall to -0.7%
10:00 Wholesale inventories are estimated to rise 0.5% from 0.3% prior