Stock Market Outlook for Wed Apr 17 2024 – Another Bounce Attempt

Prior Trading Day Summary:

Tuesday found stocks stuck in a fairly tight trading range as investors remain worried about a potential Israeli retaliatory strike against Iran and what might be the implications. For much of the day the SPX trading around the important 5050 support level and by the close it ended the day at 5051, down just 10 points. Volume remained steady at 4 billion shares traded the same as Monday’s trade. New lows though crept higher and reached 118 versus just 9 new highs. This is the highest number of new 52 week lows since early November 2023.

The NASDAQ lost just 20 points to close at 15865. Volume rose slightly to 5.1 billion shares traded but new 52 week lows shot to 367 as NASDAQ stocks continued their decline. This was also the highest number of new lows since early November 2023.

But with stocks down and the technical indicators flashing deeply oversold signals, the close on Tuesday saw the Rate Of Change indicator signal a bounce should be expected.

Let’s review the closing technical indicators on Tue Apr 16 2024 to see what to expect for Wed Apr 17 2024.

Stock Market Outlook: SPX Closing Chart For Tue Apr 16 2024

The index closed below the 50 day moving average and the Lower Bollinger Band. This usually results in a bounce attempt.

The closing candlestick is signaling deeply oversold and due to bounce. It is also bearish.

The 21 day moving average is falling which is bearish.

The 50 day moving average is rising and at 5116, which is bullish.

The 100 and 200 day moving averages are climbing which is bullish. The 200 day is at 4724 on the SPX which is bullish.

The latest Bollinger Bands Squeeze has ended with the Lower Bollinger Band falling and now below the 50 day and the Upper Bollinger Band rising. While bearish, the rising Upper Bollinger Band signals that much of the selling may be ending shortly.

The S&P chart is bearish and signaling that another bounce attempt from deeply oversold might occur on Wednesday.

SPX Stock Market Outlook review of Mon Apr 15 2024 – chart courtesy TradingView

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Wed Apr 17 2024 

The technical indicators are all pointing to the SPX stocks as deeply oversold. The Rate Of Change indicator is turning back to up and signaling that the sell-off is overdone and aside from further military action between Israel and Iran, the market is set to bounce.

On Wednesday investors get the Fed’s Beige Book at 2:00 PM which is expected to possibly shed some light on the Fed’s outlook heading into May and June. Whether this will make any major change to markets is doubtful but it will help investors who are nervous while waiting for a Fed rate cut that seemed to be continually kicked further down the road.

For Wednesday the outlook is bearish but with a possible bounce in the works and a higher close.

Potential Economic and Political Market Moving Events

There are major events this week on every day except Friday.  Wednesday we get the Fed’s Beige Book.

Monday:

8:30 Empire State manufacturing survey was expected to rise to -10.0 but instead rose to -14.3, weaker than expected.

8:30 Retails sales were expected to drop to 0.3% but rose to 0.7%

10:00 Business inventories were expected to rise to 0.4% but rose to 1.1%

10:00 Home builder confidence index came in as expected at 51, unchanged.

Tuesday:

8:30 Housing starts were expected to dip to 1.48 million but instead fell to 1.32 million.

8:30 Building permits were expected to dip to 1.51 million but dipped to 1.46 million.

9:15 Industrial production for March came in as expected at 0.4%

9:15 Capacity Utilization was estimated to rise slightly to 78.5% but rose to 78.4% instead.

Wednesday:

2:00 Fed Beige Book