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Stock Market Outlook for Tue Jun 18 2024 – Overbought – Dips Likely But Higher Close

Jun 18, 2024 | Stock Market Outlook

Stock Market Outlook overbought but higher

Prior Trading Day Summary:

On Monday the SPX opened lower on light selling but within an hour the buyers had returned. By the end of the day the S&P was at a new all-time high in a convincing rally of 41 points. The SPX closed at 5473.

The NASDAQ also reached a new all-time high as it rose 168 points to close at 17,857.

Indexes rose on Monday as investors remain convinced the Fed will have to cut rates more than once this year.

With retail sales out on Tuesday, let review the closing technical signals from  Mon Jun 17 2024 to see what to expect for Tue Jun 18 2024.


Stock Market Outlook: SPX Closing Chart For Mon Jun 17 2024

The index closed above the 21 day moving average and at the Upper Bollinger Band. This is bullish and signals overbought.

The closing candlestick is bullish for Tuesday..

The 21 day moving average is still climbing continuing the latest up signal.

The 50 day moving average is climbing which is bullish.

The 200 day moving average is still climbing. The 200 day is at 4902 which is bullish and the 100 day is also climbing to 5123.

The Lower Bollinger Band is falling below the 50 day moving average and the Upper Bollinger Band is rising. The latest Bollinger Bands Squeeze is ending with the SPX moving higher.

The S&P chart is bullish for Tuesday despite signaling overbought.

SPX Stock Market Outlook review of Mon Jun 17 2024


Stock Market Outlook: Technical Indicators Review

Momentum: Momentum is rising 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 Thu Jun 6 2024. On Mon Jun 17 2024 the up signal was stronger. The MACD histogram gained strength.

  • 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 falling and positive.

  • 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 an up 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 signal is risingand 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 rising signaling that Tuesday will end higher.

  • 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

5500 is resistance
5490 is resistance
5475 is resistance
5465 is resistance
5450 is resistance
5425 is resistance
5400 is resistance
5375 is resistance
5350 is resistance
5325 is resistance
5310 is resistance
5300 is resistance
5275 is support
5250 is light support
5225 is light support
5200 is good support
5190 is light support


Stock Market Outlook for Tue Jun 18 2024 

For Tuesday the technical indicators are almost all pointing to a higher day but with a chance for an early morning dip as markets remain overbought.

Retail sales are released today at 8:30 which could stall the rally if they show too much strength.

Overall though the outlook is still higher for the SPX on Tuesday.


Potential Economic and Political Market Moving Events

The biggest economic events this week are retail sales on Tuesday and PMI numbers on Friday.

Monday:

8:30 Empire State manufacturing survey is expected to rise to -10.5 from -15.6 prior

Tuesday:

8:30 Retail sales are estimated to rise slightly to 0.2% from 0.0%

9:15 Industrial production is estimated to rise to 0.4% from 0.0%

9:15 Capacity utilization is estimated at 78.6% versus 78.4% prior

10:00 Business inventories are expected to rise to 0.3% from -0.1%






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