Prior Trading Day Summary:
Tuesday saw a typical bear market bounce that trapped a large number of investors. The early morning bounce seemed strong but volumes were low. When the news came regarding Chinese tariffs the market fell apart. Volumes rose as the index fell hitting many sell signals and no doubt, margin calls from investors.
It was another dramatic day with the SPX down 79 points and closing below 5000 at 4982. This places the SPX down at levels seen April 19 2024 when the SPX closed at 4967. Volume was huge again at 7.5 billion. There were 584 new lows and just 1 new high. 88% of the volume was to the downside and 74% of all stocks fell.
The NASDAQ lost 335 points to close at 15,268. Volume was 10.7 billion shares with 81% of it falling. There were 25 new highs but 790 new lows.
The numbers are typical of a bear market. The S&P is down 19% from its 52 week high made just weeks ago on Feb 19.
The NASDAQ is down 22.5% from its 52 week high made Dec 16 at 20,204.
With futures early Tuesday morning showing another large decline to start Wednesday, let’s review the technical indicators at the close on Tue Apr 8 2025 to see what to expect for stocks on Wed Apr 9 2025.
Stock Market Outlook: SPX Closing Chart For Tue Apr 8 2025
The index closed jabove Tuesday’s low but the index is very bearish.
The closing candlestick shows an extremely oversold index with a chance for a bounce on any good news. This is typical of bear markets and rallies can last more than a couple days, dragging in more investors before the rally fails and crushes investors in a downturn. The closing candlesticks for the past 3 days are all cautionary signals.
The 21 day moving average is falling and closed at 5551 which is very bearish. The 21 day moving average fell below the 50 day on Friday Mar 7/ It fell below the 100 day on Thursday Mar 13 for a second down signal and on Friday Mar 28 it fell below the 200 day for a third down signal.
The 50 day moving average is falling and closed at 5802 which is bearish.
The 100 day moving average is falling and closed at 5775 which is bearish.
The 200 day moving average is falling and closed at 5677 which is bearish.
All the moving averages are picking up the pace as they are falling lower, quicker.
The Lower Bollinger Band is falling sharply signaling more downside is ahead. The Upper Bollinger Band is turning sharply higher which signals more downside ahead.
For Wednesday the SPX chart is still strongly bearish and points to a bounce attempt at any time. However after Tuesday’s failed bounce, investors are worried and will not easily buy into a rally.
SPX Stock Market Outlook review of Tue Apr 8 2025
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and negative. It is very oversold. The reading is extreme at -721. These are crash levels.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Thu Apr 3 2025. On Tue Apr 8 2025 the down signal was very strong. The signals are at levels considered oversold and a bounce is likely. This is the strongest down signal from the MACD since the 2019 pandemic panic.
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Ultimate Oscillator: The Ultimate Oscillator is falling and negative. It is not yet at oversold levels.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is oversold. It almost issued an up signal early in the day as you can see in the chart.
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Relative Strength Index: The RSI signal is falling and extremely oversold and at a reading of 9.11 a bounce should be expected at any time.
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| Rate of Change: The rate of change signal is rising and signaling a higher close could happen on Wednesday. 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 |
| 5800 is resistance |
| 5775 is resistance |
| 5750 is resistance |
| 5730 is resistance |
| 5700 is resistance |
| 5650 is resistance |
| 5630 is resistance |
| 5600 is resistance |
| 5550 is resistance |
| 5500 is resistance |
| 5450 is support |
| 5400 is support |
| 5230 is support |
| 5000 is support |
| 4770 is support |
| 4680 is support |
| 4500 is support |
| 4365 is support |
| 4150 is support |
| 4000 is support |
Stock Market Outlook for Wed Apr 9 2025
The signals for today are showing an extremely oversold market that is at levels seen in panicked markets. Some technical readings are at levels seen in market crashes.
Staying cautious is essential and reducing risk should be considered. Even selling covered calls in any rally, such as yesterday’s, is probably a good idea while waiting for the selling to end.
That won’t be the case on Wednesday as the day will lend lower as the tariffs continue to take center stage. We could see some support late in the week when banks begin to roll out their latest earnings.
Potential Economic and Political Market Moving Events
Monday:
3:00 Consumer credit is estimated to decline to $15.5 billion from $18.1 billion prior
Tuesday:
6:00 AM NFIB optimism indexcame in lower than estimated at -97.4
Wednesday:
10:00 Wholesale inventories are estimated to fall to 0.3% from 0.8% prior.
2:00 Fed minutes from March interest rate meeting