Prior Trading Day Summary:
On Tuesday investors took profits across a broad spectrum of the market. Financial stocks managed to hold gains and many moved higher. Some health care stocks also climbed but tech stocks and many large cap stocks fell. Surprisingly small cap stocks also pulled back despite analysts calling for this sector to do well in January.
The S&P closed down 27 points at 4742 and the NASDAQ fell 245 points to end the day at 14765, back below 15,000.
Let’s review the closing technical indicators from Tue Jan 2 2024 to see what to expect for the second trading day of 2024.
Stock Market Outlook: SPX Closing Chart For Tue Jan 2 2024
The index closed above all major moving averages but well below the Upper Bollinger Band.
The 21 day moving average is rising further, which is bullish. It has been in a steady rise without even a dip since Nov 22.
The closing candlestick is bearish for Wednesday.
The 50 day moving average is above the 100 day and still climbing which is bullish.
The 100 and 200 day moving averages are climbing which is bullish.
The Lower Bollinger Band has moved back above the 50 day moving average which is bearish. The Upper Bollinger Band is starting to turn down which is bearish.
The S&P chart is less bullish heading into Wednesday.
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Thu Nov 2. On Tue Jan 2 2024 a new unconfirmed down signal was generated. The histogram is negative.
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Ultimate Oscillator: The Ultimate Oscillator is falling and positive.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is positive. It is still overbought.
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Relative Strength Index: The RSI signal is falling and negative.
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Rate of Change: The rate of change signal is falling and positive. It is signaling a change may occur on Wednesday or Thursday.
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Stock Market Outlook: Support and Resistance Levels |
| 4815 is resistance |
| 4800 is resistance |
| 4780 is resistance |
| 4750 is resistance |
| 4720 is resistance |
| 4700 is resistance |
| 4675 is support |
| 4650 is support |
| 4625 is support |
| 4600 is support |
| 4590 is support |
| 4575 is light support |
| 4565 is light support |
| 4550 is support |
| 4535 is support |
| 4520 is support |
| 4500 is support |
Stock Market Outlook for Wed Jan 3 2024
At the close of trading on Tuesday the MACD technical indicator issued an unconfirmed down signal. This has been a reliable technical indicator. I’ll be watching to see if the down signal is confirmed on Wednesday by the close.
Meanwhile the other technical indicators lost strength and all are signaling weakness and pointing to a lower day on Wednesday.
A bounce is a possibility intraday on Wednesday but the day will end with the SPX lower.
On Wednesday at 2:00 PM we get the Minutes of the Fed’s December meeting. This probably will not move markets but sometimes investors have been surprised by what the minutes contained. Investors should be prepared for some volatility Wednesday afternoon.
Potential Economic and Political Market Moving Events
Major economic events this week include the latest Fed minutes on Wednesday at 2 PM and Friday is the December non-farm payroll numbers. Both of these events could swing markets.
Tuesday:
9:45 S&P final manufacturing PMI was expected at 48.2 but came in at 47.9
10:00 Construction spending was expected unchanged at 0.6% but came in weaker at 0.4%
Wednesday:
10:00 Job openings are expected at 8.8 million
10:00 ISM manufacturing is expected at 47.2%
2:00 Minutes of Fed’s December meeting