Stock Market Outlook for Thu Oct 12 2023 – MACD Up Signal Confirmed

Prior Trading Day Summary

On Wed Oct 11 2023 investors received disappointing PPI numbers. By 1:30 investors had sold the SPX down to 4345 just below the 4350 support level. That ended up being the low for the day as investors turned around and bought stocks, pushing the index to close up 18 points to 4376. This marked the 4th straight day of gains for the index and each day has seen dips bought, something that was lacking for several weeks.

The NASDAQ rose 96 points to end the day at 13,659. Volume fell to 4.3 billion shares traded and while new highs are still above 50, new lows are stubborn and rose to 210.

Let’s review the closing technical indicators from Wed Oct 11 2023 to see what to expect for Thu Oct 12 2023.

Stock Market Outlook: SPX Closing Chart For Wed Oct 11 2023

The index closed below the 50 day moving averages which is bearish but closed above the 200, 100 and 21 day moving averages which is bullish.

The closing candlestick is bullish for Tuesday but once again we see another long shadow at the close. These shadows keep advising that investors are buying but nervous. The index closed at the high of the day which often means some weakness will be seen Thursday morning but then a move higher in the afternoon. A lot will depend on the CPI numbers due on at 8:30.

The 21 and 50 day moving averages are still falling. You can see in the chart that the 21 day is below the 100 day for a second down signal. Remember that the signals are trailing indicators which means we could see the 21 day move back above the 100 day if the rally continues.

The 200 day moving average is continuing to climb which is bullish. The 100 day moving average is falling which is bearish.

The Lower Bollinger Band is turning higher which is bullish.  The Upper Bollinger Band is falling which is bearish. The S&P chart is still very bearish but is showing signs of trying to retake to at least the 50 day which is above 4400.

Stock Market Outlook review of Wed Oct 11 2023

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Thu Oct 12 2023 

Note that the support/resistance chart has changed with the 4350 valuation showing it is support once again.

For Thursday investors get the latest Consumer Price Index numbers (CPI). These are the most important inflation numbers and if they come in higher than 0.4% stocks could stall even if bonds fall. A number that high will probably push the Fed to a rate hike in November.

The CPI numbers are out at 8:30 so we will know how the market reacts before the open. If the number is 0.4% or lower, expect stocks to move higher.

The MACD up signal is important. I would expect that if Thursday is weak, Friday could still see the rally continue depending on the CPI numbers.

Potential Economic and Political Market Moving Events

The most important report this week is today’s PPI which is expected to fall to 0.3% from 0.7%.  The other event is Thursday’s Consumer Price Index (CPI) which is expected to fall to 0.3% from 0.6%. If percentages rise, stocks could fall.

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims

8:30 CPI numbers

Wednesday:

8:30 Producer Price Index (PPI) came in at 0.5% and Core CPI was 0.3% (both numbers are higher than estimated)

2:00 FOMC September minutes

Tuesday:

10:00 Wholesale Inventories are expected to remain unchanged at -0.1%

Monday:

No events

Bond market closed – bullish for stocks.