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

May 15, 2024 | Stock Market Outlook

Stock Market Outlook Choppy Dips Likely HigherPrior 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 handful of points away from its all-time high and the NASDAQ was sitting at a new high.

The SPX rose 25 points to end the day at 5246. The NASDAQ climbed 123 points and ended at 16511 a new all-time closing high.

For Wednesday investors get the latest CPI numbers and that will impact at least the morning. The technical indicators will have more impact but he afternoon.

Let review the closing technical signals from Tue May 14 2024 to see what to expect for Wed May 15 2024.


Stock Market Outlook: SPX Closing Chart For Tue May 14 2024

The index closed above the 21 day moving average and the 50 day and at the Upper Bollinger Band. This is bullish.

The closing candlestick is bullish for Wednesday.

The 21 day moving average is still below the 50 day moving average for a down signal but finally turning up. This is bullish.

The 50 day moving average is climbing which is bullish.

The 200 day moving average is still climbing. The 200 day is at 4791 which is bullish and the 100 day is also climbing.

The Lower Bollinger Band is below the 100 day moving average and falling. This is bullish. The Upper Bollinger Band is turning higher. This is bullish.

The S&P chart is more bullish that bearish for Wednesday which will support the bulls even if the CPI numbers disappoint.

SPX Stock Market Outlook review of Tue May 14 2024 – Chart courtesy TradingView


Stock Market Outlook: Technical Indicators Review

Momentum: Momentum is rising and positive.

  • Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Fri May 3. The up signal gained more strength on Tue May 14 2024.

  • 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 rising.

  • 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 potential change signal in place and is overbought.

  • 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 rising and positive. It is overbought.

  • 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 signaling that Wednesday will be higher.

  • 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 support
5125 is support
5115 is support
5100 is support
5075 is support
5050 is support
5025 is support
5000 is light support
4990 is light support


Stock Market Outlook for Wed May 15 2024 

On Wednesday before the open, investors get the latest Consumer Price Index numbers including core CPI and year-over-year. The expectation is a drop to 3.4% from 3.5% for year-over-year. The CPI index is expected to rise to 0.4% from 0.3% prior. We also get retails sales with and without autos which are expected to come in at 0.2% (without autos), down from 0.9% prior.

The the reports are close the index will climb from the open. If the reports are disappointing, we should see some weakness but the day may still end higher.


Potential Economic and Political Market Moving Events

There are a number of reports this week that will impact markets. The Producer Price Index on Tuesday and Consumer Price Index on Wednesday could move markets.

Monday:

There are no reports released today.

Tuesday:

8:30 Producer Price Index reports

10:00 Fed Chair Powell speaks

Wednesday:

8:30 Consumer Price Index reports

8:30 Retail sales with and without autos

10:00 Home builder confidence index

10:00 Business inventories

 






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