FullyInformed.com

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

Apr 16, 2024 | Stock Market Outlook

Stock Market Outlook Another bounce attempt probablePrior 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

Momentum: Momentum is falling and negative. It is deeply oversold. Normally we should expect a bounce.

  • Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tue Apr 2. On Tue Apr 16 2024 the down signal gained strength. The MACD histogram is strongly negative. Usually a bounce can be expected at this negative a level.

  • 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 oversold. Normally a bounce should be expected.

  • 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 a down signal in place. It is deeply oversold and almost always signals this low result in a bounce.

  • 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 falling and deeply oversold. Almost always a bounce should be expected.

  • 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 and oversold. It is signaling to investors that a move higher should be expected for Wednesday or Thursday.

  • 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

5275 is resistance
5250 is resistance
5225 is resistance
5200 is resistance
5190 is resistance
5175 is resistance
5150 is resistance
5125 is resistance
5115 is resistance
5100 is support
5075 is support
5050 is support
5025 is support
5000 is light support
4990 is light support
4975 is light support
4950 is support


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






Search

Select to view all results...

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Recent Outlooks

Stock Market Outlook for Mon May 20 2024 – Choppy, Dip Possible But Still Up

Prior Trading Day Summary: On Friday investors spent most of the day taking profits until by 2:30 the index was down around 5285. Buyers then stepped back in and pushed the index to close at 5303, back above the 5300 …

Morning Investing Strategy Notes for Fri May 17 2024

For FullyInformed Members the morning Investing Strategy Notes for Fri May 17 2024 discuss the outlook following Thursday’s slightly lower close. Stocks and trade ideas discussed include, NVIDIA Stock (NVDA), Microsoft Stock (MSFT), Applied Materials Stock (AMAT), Apple Stock (AAPL), …

Stock Market Outlook for Fri May 17 2024 – Overbought – Choppy Bias Lower

Prior Trading Day Summary: On Thursday many investors took profits with indexes sitting at all-time highs. Trading volume on the NASDAQ was the highest in over a year with more than 12 billion shares traded. The SPX saw just shy …

Morning Investing Strategy Notes for Thu May 16 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu May 16 2024 discuss the outlook following Wednesday’s massive rally to new all-time highs. There are comments and a number of trades outlined for today including, NVIDIA Stock (NVDA), Microsoft …

Stock Market Outlook for Thu May 16 2024 – Choppy But Higher

Prior Trading Day Summary: On Wednesday the CPI numbers came in on the low side of estimates which cheered investors. From the outset stocks climbed into new highs. By the close, the SPX was above 5300, up 61 points to …

Morning Investing Strategy Notes for Wed May 15 2024

For FullyInformed Members the morning Investing Strategy Notes for Wed May 15 2024 discuss the outlook as investors get the latest CPI numbers this morning. There are comments and a number of trades outlined for today including, Intel Stock (INTC), …

Stock Market Outlook for Wed May 15 2024 – CPI Numbers – Choppy – Dips Likely But Higher

Prior Trading Day Summary: On Tuesday the PPI numbers were disappointing coming in at 0.4% versus the expected 0.2%. The initial reaction was negative but by early afternoon stocks started to rally. By the close the SPX is just a …

Morning Investing Strategy Notes for Tue May 14 2024

For FullyInformed Members the morning Investing Strategy Notes for Tue May 14 2024 discuss the outlook as investors head into the latest PPI numbers on Tuesday before markets open. There are comments and a number of trades outlined for today …

Stock Market Outlook for Tue May 14 2024 – All About The PPI Numbers – Mixed Outlook

Prior Trading Day Summary: On Monday stocks spent most of the day drifting sideways while waiting for the PPI numbers on Tuesday and CPI numbers on Thursday. Both of these numbers will give a clearer picture of the inflation outlook …

Morning Investing Strategy Notes for Mon May 13 2024

For FullyInformed Members the morning Investing Strategy Notes for Mon May 13 2024 discuss the outlook as markets remain overbought to start the week. There are comments and a number of trades outlined for today including, Chevron Stock (CVX), Exxon …

Stock Market Outlook for Mon May 13 2024 – Overbought – Dips Likely But Higher Close

Prior Trading Day Summary: On Friday stocks closed almost unchanged with the SPX up 8 points and the NASDAQ down 5 points. Volume was low on both New York and the NASDAQ. Let’s review the closing technical indicators from Fri …

Morning Investing Strategy Notes for Fri May 10 2024

For FullyInformed Members the morning Investing Strategy Notes for Fri May 10 2024 discuss the outlook as the index moves higher and deeper into overbought readings. There are comments and a number of trades outlined for today including, Morgan Stanley …

Stock Market Outlook for Fri May 10 2024 – Overbought – Dips Likely But Bullish

Prior Trading Day Summary: On Thursday stocks in the morning faced some selling which kept the index under pressure until late in the afternoon. When sellers pulled back the SPX moved higher into the close, reaching 5214, up 26 points …

Morning Investing Strategy Notes for Thu May 9 2024

For FullyInformed Members the morning Investing Strategy Notes for Thu May 9 2024 discuss the outlook following a second flat trading day for the SPX. There are comments and a number of trades outlined for today including, ARM Stock (ARM), …