Prior Trading Day Summary:
On Tuesday most stocks tumbled as a number of reports including the ISM manufacturing report came in weaker than estimated which analysts advised showed a recession is likely and a rate cut even a half percentage will be too late to avoid a recession. Tech stocks, in particular the semiconductors lead the decline with NVIDIA Stock (NVDA) collapsing over 9%, AMD down almost 8%, Marvell Stock (MRVL) down 8%, ARM Stock (ARM) down 6.8% and Taiwan Semiconductor Stock (TSM) down 6.5% to mention just a few. The day was reminiscent of the plunge on August 5.
By the close the SPX was down 119 points to close at 5529. Considering on Friday the SPX had risen 56 points, Tuesday’s loss was not as pronounced overall as the 160 point loss on August 5. That day was after a 100 point loss on August 2 which made August 5 more severe.
The NASDAQ collapsed 577 points ending the day at 17136. Again, considering Friday had risen 197 points, Tuesday’s loss was not as severe as August 5 when the NASDAQ had lost 417 points on Aug 2 and 576 points on Aug 5.
The action on Tuesday was solidly negative with 3.9 billion shares traded on the SPX and 71% of all stocks falling. 5.9 billion shares were traded on the NASDAQ and 75% of all stocks falling.
Let’s review the closing technical indicators from Tue Sep 3 2024 to see what the signals advise for Wed Sep 4 2024.
Stock Market Outlook: SPX Closing Chart For Tue Sep 3 2024
The index closed above all the major moving averages but reached the 50 day before closing slightly above it. This is bearish.
The closing candlestick is bearish with a small shadow which signals a possible bounce attempt which will fail on Wednesday.
The 21 day moving average is turning higher but failed to cross above the 50 day. This is bearish.
The 50 day moving average is rising and closed only slightly higher at 5504. This is bearish.
The 100 day moving average is rising and closed at 5373 which is bullish.
The 200 day moving average is in an uptrend and closed at 5148 which is bullish.
The Lower Bollinger Band is below the 100 day moving average but is turning up which is bearish.
The Upper Bollinger Band is turned sideways after Tuesday’s market sell-off. This is bearish.
The S&P chart is still more bullish than bearish but they are more bearish signals after Tuesday’s plunge.
SPX Stock Market Outlook review of Tue Sep 3 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and negative.
|
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Wed Aug 14 2024. On Tue Sep 3 2024 the up signal was a lot weaker. The MACD histogram shows we could see a negative signal on Wednesday.
|
Ultimate Oscillator: The Ultimate Oscillator is falling and negative.
|
Slow Stochastic: The Slow Stochastic has a down signal in place. It is not overbought.
|
Relative Strength Index: The RSI signal is falling and negative.
|
Rate of Change: The rate of change signal is falling signaling Wednesday will end lower.
|
Stock Market Outlook: Support and Resistance Levels |
| 5615 is resistance |
| 5600 is resistance |
| 5575 is resistance |
| 5550 is resistance |
| 5540 is resistance |
| 5525 is resistance |
| 5500 is resistance |
| 5470 is support |
| 5450 is support |
| 5425 is support |
| 5400 is support |
| 5375 is support |
| 5350 is support |
| 5325 is support |
| 5300 is support |
Stock Market Outlook for Wed Sep 4 2024
On Friday many stocks and the markets were sitting at all-time highs. Often fund managers sell out at the start of September as they adjust for the fall season and take profits. That was part of the selling on Tuesday but as explained many times before, selling causes more selling and as momentum shifts to the downside even more investors sell out. Fear runs high as investors hate big down days.
The selling on Tuesday has the index just above the 50 day moving average. There is a small chance of a bounce on Wednesday but stocks will end lower. Investors will be nervous for the next two days as they wait for the August non-farm payroll numbers due out on Friday. Stocks could tumble lower ahead of those numbers. Caution is advised. I took profits on Tuesday and raising cash.
For today, watch for a bounce but expect a lower close. The Fed’s Beige Book due out today at 2:00 PM might see a bit of a rally ahead of its release but nothing new is expected.
Potential Economic and Political Market Moving Events
Monday:
Holiday
Tuesday:
9:45 S&P final manufacturing PMI was expected to come in at 48 but came in at 47.9
10:00 Construction spending was estimated to rise to -0.1% but stayed at -0.3% which is why housing sector fell on Tuesday
10:00 ISM manufacturing was expected to rise to 47.9% from 46.8% but rose to 47.2%. Anything below 50 is considered contraction in the economy
Wednesday:
8:30 Trade deficit is expected at -79.1 billion
10:00 Job openings is expected to come in at 8.1 million
10:00 Factory orders are estimated to rise to 5%
2:00 Fed Beige Book