Prior Trading Day Summary:
On Friday stocks finally bounced on good volume to end the week on a positive note.
The S&P closed up 74 points for the best one day gain since Nov 6. Volume jumped to 3.8 billion shares with 67% of all volume traded to the upside. 75% of all stocks were climbing. For the week, the index ended down just 28 points to close at 5942.
The NASDAQ rose 341 points, the best one day rally since December 11. Volume was 8.5 billion shares traded, 500 million less than on Thursday. 78% of all volume was being traded higher and 71% of all stocks were rising, the best one day gain since November 5.
For the week, the NASDAQ was lower by 100 points.
With a strong rally on Friday, the next question is whether the rally has any staying power.
Let’s review the technical indicators at the close on Fri Jan 3 2025 to see if the rally can continue Mon Jan 6 2025.
Stock Market Outlook: SPX Closing Chart For Fri Jan 3 2025
The index closed below the 21 day but at the 50 day moving averages. This is still bearish.
The closing candlestick is bullish but signals that the morning could see some further profit-taking and a dip. A higher close however is expected.
The 21 day moving average fell back to 5997 which is bearish.
The 50 day moving average is rising and closed at 5944 which is bullish.
The 100 day moving average is rising and closed at 5807 which is bullish.
The 200 day moving average is in an uptrend and closed at 5564 which is bullish.
The Lower Bollinger Band is below the 50 day and moving lower which is bearish. It may fall below the 100 day shortly which would be a bearish signal. The Upper Bollinger Band is falling which is bearish.
The S&P chart is still more bearish than bullish but with signs that Monday may end higher.
SPX Stock Market Outlook review of Fri Jan 3 2025
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is rising and almost positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tuesday Dec 10 2024 . The down signal lost strength on Fri Jan 3 2025.
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Ultimate Oscillator: The Ultimate Oscillator is rising.
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Slow Stochastic: The Slow Stochastic has a down signal in place but looks set to bounce for an up signal.
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Relative Strength Index: The RSI signal is rising.
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Rate of Change: The rate of change signal is rising and signaling a higher close is expected on Monday.
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Stock Market Outlook: Support and Resistance Levels |
| 6100 is strong resistance |
| 6090 is resistance |
| 6070 is resistance |
| 6050 is resistance |
| 6025 is resistance |
| 6015 is resistance |
| 6000 is resistance |
| 5990 is resistance |
| 5970 is resistance |
| 5950 is resistance |
| 5900 is support |
| 5890 is support |
| 5875 is support |
| 5850 is support |
| 5825 is support |
| 5800 is support |
| 5790 is support |
| 5775 is support |
| 5765 is support |
| 5750 is support |
| 5725 is support |
| 5700 is support |
Stock Market Outlook for Mon Jan 6 2025
Friday saw a strong rally but a number of stocks are now overbought. The chance of more profit-taking Monday morning is high. The technical indicators however are pointing to Monday as closing higher.
With the Santa Claus Rally failure, the first five trading days of January are important for stocks. Historically when the first 5 trading days end higher, stocks have had a good year.
This is a short week due to the National Day of Mourning on January 9. On Friday we are still expected to get the December non-farm payroll report. I will be setting up a trade on Wednesday ahead of that report.
Potential Economic and Political Market Moving Events
Monday:
9:45 S&P final services PMI is estimated to be unchanged at 58.5
10:00 Factory orders for November are estimated to have declined to -0.3% from 0.2% prior