Prior Trading Day Summary:
On Monday stocks opened higher and spent the day building on the opening. By the end of the day the SPX was up 21 points on 4.1 billion shares traded. The SPX closed at 4740.
The NASDAQ saw 6.1 billion shares traded and closed higher by 91 points to 14,905.
Aside from oil rising with trouble in the Red Sea, Home Builder confidence came in higher than expected at 37. Meanwhile home builder stocks are already at 52 week highs although they look like there is more upside to come. On Tuesday investors get the latest on housing starts and building permits, both of which have been upgraded recently.
Let’s review the closing technical indicators from Mon Dec 18 2023 to see what to expect for Tue Dec 19 2023.
Stock Market Outlook: SPX Closing Chart For Mon Dec 18 2023
The index closed above all major moving averages and above the Upper Bollinger Band. This is bullish.
The 21 day moving average is rising further, which is also bullish. It reached SPX 4600 on Monday.
The closing candlestick is bullish for Tuesday but also signaling stocks are overbought. With the 21 day at 4600 the index could stall for a day or even two before moving higher.
The 50 day moving average is above the 100 day.
The 100 and 200 day moving averages are climbing which is bullish.
The Lower Bollinger Band is turning lower and the Upper Bollinger Band is turning higher, signaling the Bollinger Bands Squeeze is ending.
The S&P chart is continuing bullish.
Stock Market Outlook review of Mon Dec 18 2023
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is rising and positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thu Nov 2. On Mon Dec 18 2023 the up signal gained strength.
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Ultimate Oscillator: The Ultimate Oscillator is falling and positive. It is signaling overbought.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is positive. It is also into overbought readings.
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Relative Strength Index: The RSI signal is rising and positive. It is very overbought.
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Rate of Change: The rate of change signal is falling and positive. It is signaling that we could see a sideways day on Tuesday.
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Stock Market Outlook: Support and Resistance Levels |
| 4800 is resistance |
| 4780 is resistance |
| 4750 is resistance |
| 4720 is resistance |
| 4700 is resistance |
| 4675 is resistance |
| 4650 is resistance |
| 4625 is support |
| 4600 is support |
| 4590 is support |
| 4575 is light support |
| 4565 is light support |
| 4550 is support |
| 4535 is support |
| 4520 is support |
| 4500 is support |
| 4475 is support |
| 4450 is support |
Stock Market Outlook for Tue Dec 19 2023
For Tuesday the technical indicators are showing stocks as overbought and the 21 day moving average has reached 4600 on the SPX. Normally investors should expect a slowing of the rally or even some sideways movement for a day or even two before the rally continues higher. However volume continues to show buying is heavy with so many investors trying to get into the rally. That means the index may not stall but continue to rise at a slower pace. Any dips at present, even shallow ones are finding ready buyers. With many investors not in stocks, dips are being watched as opportunities to jump into trades. The outlook remains bullish.
Potential Economic and Political Market Moving Events
Major economic events this week are Housing starts on Tuesday, GDP (revised) on Thursday and durable goods orders on Friday. This week is light on economic data which often assists the bulls in pushing stocks higher.
Monday:
Home builder confidence is expected to come in higher at 36 from last month’s 34 but came in at 37
Tuesday:
8:30 Housing starts are expected to be 1.36 million
8:30 Building permits are expect to be 1.48 million