Prior Trading Day Summary:
On Thursday investors turned a blind eye to lower Weekly Jobless claims, rising housing starts and a jump in building permits and returned to buying stocks.
Volumes rose with New York reach 4 billion shares traded and the NASDAQ 5.7 billion. The NASDAQ rose 200 points closing back above 15,000 again and the S&P moved up 41 points to close at 4780. This left the S&P where it was at the end of last week and the NASDAQ returned to where it was trading right after Christmas
Let’s review Thu Jan 18 2024 closing technical indicators to see what to expect for Fri Jan 19 2024 and whether Thursday was just a technical relief bounce or something more.
Stock Market Outlook: SPX Closing Chart For Thu Jan 18 2024
The index closed back above the 21 day moving average and below the Upper Bollinger Band which is bullish.
The 21 day moving average is moving sideways which is bearish.
The closing candlestick is bullish for Friday but also signals that dips should be expected.
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 200 day is moving above the 4400 on the SPX which is bullish.
The Bollinger Bands Squeeze is well underway with the Lower Bollinger Band turning lower. Signals to the downside out of the Bollinger Bands Squeeze are continuing to dominate but Thursday’s close above the 21 day is a good sign for the bulls.
The S&P chart is more bullish for Friday.
Stock Market Outlook review of Thu Jan 18 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is rising and positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tue Jan 2. The down signal lost some strength on Thursday.
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Ultimate Oscillator: The Ultimate Oscillator is rising and positive.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is pulling back from overbought.
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Relative Strength Index: The RSI signal is rising sharply and back positive.
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Rate of Change: The rate of change signal is rising and positive. It is signaling a higher day on Friday is expected.
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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 support |
| 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 Fri Jan 19 2024
For Friday the 4700 level has become support. The technical indicators all gained strength on Thursday by the close and the Moving Average Convergence / Divergence lost further strength to the down signal. This should be enough for a higher close on Friday. The economic indicators on Thursday all pointed to the economy as being stronger than analysts expected. Normally that would see stocks slip but with the index below the 21 day and many stocks fallen, investors staged a typical relief bounce off the 21 day moving average to grab some profits. With the index only 20 points from 4800, a close above it on Friday is not likely. Instead dips should be expected with a number of spikes to challenge 4800 but not close above it. A positive close though is still expected.
I will not be trading for most of Friday as I am finally get a new furnace installed after waiting over a week in very cold temperatures, for it to arrive. My home is fairly old, a lot like me, and a new install will be a major undertaking. I am looking forward to being warmer this weekend. Have a great day Friday and enjoy the weekend!
Potential Economic and Political Market Moving Events
The main economic reports this week are on retail sales on Wednesday along with the latest Fed Beige Book. Friday is consumer sentiment. More banks earnings arrive this week.
Tuesday:
8:30 Empire state manufacturing survey was expected to rise to -4.0 from -14.5 previously but instead fell to -43.7 which spooked investors on Tuesday.
Wednesday:
8:30 Important price index was expected to come in at -0.6% but came in at 0.0%
8:30 Retail sales were expected to rise to 0.4% from 0.3% but rose 0.6% surprising investors.
9:15 industrial production was expected to fall to -0.1% from 0.0%. Instead it came in at 0.1%
9:15 capacity utilization was expected to slip to 78.6% from 78.8% and met estimates.
10:00 Business inventories were expected to fall to -0.1% from 0.2%. They fell as expected.
10:00 Home builder confidence index was expected to rise to 39 from 37. Instead it rose to 44.
2:00 Fed Beige Book is released with no indication of early rate cuts or any rate cuts
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims were expected to rise to 208,000 but fell to 187,000.
8:30 Housing starts were expected to fall to 1.43 million but rose to 1.46 million.
8:30 building permits were expected to rise to 1.48 million but rose to 1.5 million
Friday:
10:00 Consumer sentiment is expected to be unchanged at 69.7
10:00 Existing home sales are expected to rise only slightly to 3.83 million