Prior Trading Day Summary
On Wed Oct 18 2023 markets dropped throughout the day as treasury yields were back climbing and the 30 year mortgage hit 7.99%, the highest level since 2000. With weakness already in stocks before 2:00 PM, the release of the Fed’s Beige Book brought nothing concrete to investors aside from “stay the course” and take a wait-and-see approach. Stocks turned lower and stayed lower almost breaking through 4300 before closing at 4314.
The SPX fell 58 points on 3.7 billion shares traded with 82% being traded to the downside.
The NASDAQ lost 219 points on 4.7 billion shares traded. 69% of that volume was to the downside.
The SPX is just above the Oct 6 close.
Let’s review the closing technical indicators from Wed Oct 18 2023 to see what to expect for Thu Oct 19 2023.
Stock Market Outlook: SPX Closing Chart For Wed Oct 18 2023
The index closed below the 50 and 100 day moving average which is bearish.
The closing candlestick is bearish for Thursday. It closed at the 21 day moving average but above the 200.
The 50 day moving average is still falling which is bearish. You can see in the chart that the 21 day is below both the 50 and 100 day and is now turning lower once again.
The 200 day moving average is continuing to climb which is bullish. The 100 day moving average is moving sideways, again a potentially bullish signal.
The Lower Bollinger Band is turning higher which is bullish. The Upper Bollinger Band is falling which is bearish and the market is back into another Bollinger Bands Squeeze. At the close on Wednesday the Squeeze looks like stocks will move lower.
The S&P chart is more bearish after the close on Wednesday.
Stock Market Outlook review of Wed Oct 18 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and still positive
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tue Oct 10. On Wed Oct 18 2023 the up signal lost strength.
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Ultimate Oscillator: The Ultimate Oscillator is falling and ready to turn negative.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is slightly overbought.
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Relative Strength Index: The RSI signal is falling and negative.
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Rate of Change: The rate of change signal is falling and negative.
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Stock Market Outlook: Support and Resistance Levels |
| 4450 is resistance |
| 4435 is resistance |
| 4420 is resistance |
| 4400 is resistance |
| 4390 is resistance |
| 4370 is resistance |
| 4350 is support |
| 4325 is support |
| 4300 is support |
| 4275 is support |
| 4250 is good support |
| 4235 is support |
| 4225 is support |
| 4200 is good support |
| 4185 is support |
| 4175 is support |
| 4150 is good support |
Stock Market Outlook for Thu Oct 19 2023
For Thursday the technical indicators are back bearish. There is a chance for a bounce in the morning but also a chance the SPX will fall below 4300 today. Often this fall we have seen strong down days which have most of the time, been followed by up days. On Thursday though we get the leading economic indicators and at 12:00 PM, Fed Chair Powell speaks. There is always a chance for a positive close but the outlook remains weak and bearish for stocks heading into Thursday. Netflix could help stocks try to rally but Tesla may push them lower. On Thursday before the open we get a number of companies reporting earnings. Among them Taiwan Semiconductor Stock (TSM). If they beat estimates by a wide enough margin that could assist the NASDAQ. What the bulls need however is for treasury yields and mortgage rates to ease a bit. That seems unlike for Thursday.
Potential Economic and Political Market Moving Events
The most important reports this week are retail sales on Tuesday, housing starts on Wednesday and leading economic indicators on Thursday. None of these appear favored for the bulls this week.
Monday:
8:30 Empire State manufacturing survey was expected to turn negative at -6 but came in at -4.6, not as bad as expected.
Tuesday:
8:30 Retail sales are expected to show a decline to 0.2% but instead rose to 0.7%
9:15 Industrial Production is expected to show a decline to 0.1% but instead rose to 0.3%
9:15 Capacity utilization is expected to stay unchanged at 79.7% and met estimates
10:00 Business inventories are expected to rise to 0.3% but instead rose to 0.4%
10:00 Home builders confidence is expected to be steady at 44 but instead fell to 40
Wednesday:
8:30 Housing starts are expected to rise to 1.37 million. They rose to 1.36 million.
8:30 Building permits are expected to fall to 1.45 million. They rose to 1.47 million.
2:00 Fed’s Beige Book could cause markets to fluctuate both before and after the minutes are released
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims are expected to come in at 210,000
8:30 Philadelphia Fed manufacturing survey is expected to be -6.8
10:00 Existing Home Sales are expected to fall to 3.9 million
10:00 Leading economic indicators is expected to be unchanged at -0.4%
12:00 Fed Chair Powell speech