Prior Trading Day Summary:
On Monday stocks rose again with only a small dip early morning which lasted only a few minutes. Buyers rushed in and bought the early dip and continued to buy right into the close. Volumes were reasonable at 3.4 billion shares traded on New York but the NASDAQ traded almost 5.8 billion shares.
The S&P closed up 54 points to 5608 and the NASDAQ rose 245 points to 17,876.
The S&P is just 1% from its 52 week high of $5667 and the NASDAQ is 4.25% below its 52 week high of 18,671.
It was a strong day and marked the 8th straight up day for both indexes. While not rare, it is not common and it has left many stocks overbought and at risk of a dip. However with investors focused on a September rate cut as a probability, they are continuing to buy which is making the rally broader.
Let’s review the closing technical indicators from Mon Aug 19 2024 to see what the signals advise for Tue Aug 20 2024.
Stock Market Outlook: SPX Closing Chart For Mon Aug 19 2024
The index closed above all the major moving averages on Monday which is bullish.
The closing candlestick is bullish but signals very overbought. Dips are a probability but won’t last more than a few minutes if they occur.
The 21 day moving average is turning higher and may cross back above the 50 day by week’s end. This is neutral.
The 50 day moving average is back rising and closed at 5469. This is bullish.
The 100 day moving average is rising and closed at 5323 which is bullish.
The 200 day moving average is in an uptrend and closed at 5101 which is bullish.
The Lower Bollinger Band is below the 100 day moving average and has turned lower which is bullish.
The Upper Bollinger Band is moving higher which is also bullish.
The S&P chart is strongly bullish.
SPX Stock Market Outlook review of Mon Aug 19 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is rising and positive. It is overbought.
|
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Wed Aug 14 2024. On Mon Aug 19 2024 the up signal gained strength which is readily seen in the histogram.
|
Ultimate Oscillator: The Ultimate Oscillator is rising and positive. It is overbought.
|
Slow Stochastic: The Slow Stochastic has an up signal in place and rising. It is overbought.
|
Relative Strength Index: The RSI signal is rising and positive. It is overbought.
|
Rate of Change: The rate of change signal is rising signaling Tuesday will end higher.
|
Stock Market Outlook: Support and Resistance Levels |
| 5660 is resistance |
| 5650 is resistance |
| 5625 is resistance |
| 5615 is resistance |
| 5600 is resistance |
| 5575 is resistance |
| 5550 is resistance |
| 5540 is resistance |
| 5525 is resistance |
| 5500 is resistance |
| 5470 is resistance |
| 5450 is resistance |
| 5425 is resistance |
| 5400 is support |
| 5375 is support |
| 5350 is support |
| 5325 is support |
| 5300 is support |
| 5275 is support |
| 5250 is support |
| 5225 is support |
| 5200 is support |
Stock Market Outlook for Tue Aug 20 2024
For Tuesday the technical indicators are all bullish and almost all are signaling that stocks are overbought. That has not slowed the rally but with 8 straight days of gains, a day or two of weakness should be expected. When that could happen is anyone’s guess but for Tuesday, the SPX looks steady enough that any weakness of dips won’t last and the index should still close higher.
On Wednesday we get the July FOMC minutes which are expected to show no surprises and may end up being a “non-market moving event”. On Friday Fed Chair Powell will be speaking at Jackson Hole and investors and analysts will be listening for any hint of a rate cut for September and how big it could be. The majority of analysts now expect a half point rate decrease.
Potential Economic and Political Market Moving Events
Monday:
10:00 Leading economic indicators are expected to drop from 0.2% to -0.4%. This will be in-line with analysts who expect a 50 basis point rate cut in September.
Tuesday:
No economic reports