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Stock Market Outlook for Thu May 9 2024 – Some Weakness – Possible Lower Day But Still Bullish

May 9, 2024 | Stock Market Outlook

Stock Market OutlookPrior Trading Day Summary:

On Wednesday stocks finished primarily unchanged. The SPX closed down less than a point and the NASDAQ slipped just 30 points.

Many stocks wandered on Wednesday but stayed in tight trading range. Many stocks are overbought but buyers continue to pick at stocks on dips.

Let’s review the closing technical indicators from Wed May 8 2024 to see what investors should expect on Thu May 9 2024.


Stock Market Outlook: SPX Closing Chart For Wed May 8 2024

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

The closing candlestick is signaling that Thursday will see some further selling and a chance for a lower close. The index might retest the 50 day moving average down at 5136.

The 21 day moving average is below the 50 day moving average for a down signal but should turn up shortly. The first down signal is still in effect.

The 50 day moving average is back climbing which is bullish.

The 200 day moving average is still climbing. The 200 day is at 4774 which is bullish and the 100 day is also climbing.

The Lower Bollinger Band is below the 100 day moving average but turned sideways and should climb shortly. The Upper Bollinger Band is falling which is bearish.

The S&P chart is equally bullish as it is bearish for Thursday.

SPX Stock Market Outlook review of Wed May 8 2024 – chart courtesy TradingView


Stock Market Outlook: Technical Indicators Review

Momentum: Momentum is falling and positive.

  • Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Fri May 3. The up signal gained more strength on Wed May 8 2024.

  • 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 and overbought.

  • 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 a potential change signal in place and is overbought.

  • 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 signalhas a potential change signal and positive. It is overbought.

  • 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 unchanged for Thursday indicating stocks may have a hard time rising today.

  • 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

5275 is resistance
5250 is resistance
5225 is resistance
5200 is resistance
5190 is resistance
5175 is resistance
5150 is resistance
5125 is resistance
5115 is resistance
5100 is support
5075 is support
5050 is support
5025 is support
5000 is light support
4990 is light support
4975 is light support
4950 is support


Stock Market Outlook for Thu May 9 2024 

For Thursday the close on Wednesday continues to point to bullishness but with many stocks overbought we could see a choppy day or sideways action with the potential for a lower close. The 50 day moving average might be tested today. Overall markets remain bullish.

On Thursday we get the latest Weekly Initial Unemployment Insurance Claims which could move markets at the open depending on the weekly numbers.


Potential Economic and Political Market Moving Events

The main event this week is on Friday when the consumer sentiment is released.

Monday:

Two Fed Presidents speak. One at 12:50 and a second at 1:00 PM. Their comments are not expected to impact stocks.

Tuesday:

3:00 Consumer Credit expected to rise to $15.0 billion

Wednesday:

10:00 Whole inventories dipped to -0.4%

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are expected to come in at 214,000






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