Stock Market Outlook for Tue Mar 19 2024 – Choppy Dips Likely But Still Up

Prior Trading Day Summary:

On Monday investors took advantage of the past two weeks of weakness to jump back into stocks.

By the close the S&P was up 32 points to close at 5149. The 32 points wiped out the losses from the past two weeks when the index had lost a total of 20 points.

The NASDAQ closed up 130 points to 16103. The past two weeks saw a total loss of 301 points so today’s bounce recovered 43% or not quite half of the losses the index sustained.

On Wednesday investors get the latest FOMC interest rate decision which is widely expected to be a non-event. Despite this, Tuesday could be choppy ahead of the interest rate decision as some investors remain nervous.

Let’s review the close on Mon Mar 18 2024 to see what to expect for Tue Mar 19 2024.

Stock Market Outlook: SPX Closing Chart For Mon Mar 18 2024

The index closed below the Upper Bollinger Band but back above the 21 day moving average. This is bullish for the index.

The closing candlestick is bullish for Tuesday but the long shadow indicates the chance of dips on Tuesday.

The 21 day moving average is moving higher which is bullish. It is at 5100 on the SPX.

The 50 day moving average is rising and at 4970, which is bullish.

The 100 and 200 day moving averages are climbing which is bullish. The 200 day is at 4620 on the SPX which is bullish.

The Bollinger Bands are still in a Bollinger Bands Squeeze. The Lower Bollinger Band moved back above the 50 day on Thursday last week which is bearish. It is now trending sideways. The Upper Bollinger Band is flat and also trending sideways which is bearish.

The S&P chart is more bullish than bearish for Tuesday with the biggest warning coming from Monday’s closing candlestick.

SPX Stock Market Outlook review of Mon Mar 18 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Tue Mar 19 2024 

As of the close on Monday the 5015 level becomes support for the SPX. The 5010 resistance level is gone. The close of the SPX on Monday is both bullish and bearish. The index broke through the 5150 support level intraday on good volume which is bearish but then rallied back to just below it at 5149 by the close which is bullish.This moved the 5025 level to support as the index continues to hold support levels around 5150.

On Tuesday the technical indicators are signaling both weakness as well as strength. With the FOMC decision on interest rates due out on Tuesday, most investors and analysts believe there will be no interest rate decrease or increase. Normally we can expect the index to close higher on the day before the decision is released.

The closing candlestick though was clearly signaling dips are possible and they could be deeper than anticipated.

For Tuesday then, watch for dips that could develop but for today they are opportunities to setup trades as the overall signal is still up for the SPX.

Potential Economic and Political Market Moving Events

Wednesday and Thursday are the busiest days for economic reports that could change market direction.

Monday:

10:00 Home Builder confidence index came in as expected at 48 which is basically “steady” for housing.

Tuesday:

8:30 Housing starts are expected at 1.43 million

8:30 Building permits are estimated to be 1.49 million