Prior Trading Day Summary:
On Friday the December jobs reports showed the labor market remains strong and investors reacted with a bounce attempt pushing the SPX to 4721. The afternoon though still saw selling and the index ended the day just below the 4700 support level at 4697, up 8 points.
The NASDAQ managed a small gain of just 13 points to close at 14,524.
For the first week of January the SPX ended down 72 points and the NASDAQ lost 487 points. This ended a nine week rally.
The question now is whether the first week is an indication of further weakness or consolidating of recent gains before moving higher.
Stock Market Outlook: SPX Closing Chart For Fri Jan 5 2024
The index closed just below the 21 day moving average which is often followed by a bounce attempt.
The 21 day moving average is trending sideways which is bearish.
The closing candlestick is signaling a bounce is possible for Monday.
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 more bearish than bullish heading into Monday.
Stock Market Outlook review of Fri Jan 5 2024
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 Tue Jan 2. The down signal was stronger on Friday.
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Ultimate Oscillator: The Ultimate Oscillator is rising and negative. It is on the verge of oversold readings.
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Slow Stochastic: The Slow Stochastic has a down signal in place and nearing oversold levels.
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Relative Strength Index: The RSI signal is rising and negative. It is trying to bounce from oversold.
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Rate of Change: The rate of change signal is rising and positive. It is signaling a small bounce could occur on Monday.
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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 Mon Jan 8 2024
For Monday the morning open may be lower as weakness has definitely set in, but the signals still show a potential for a bounce. Overall the SPX is down just 96 points from its rally high of 4793. This is a loss of just 2% and typical in a bull market.
The closing candlestick is still signaling a bounce as likely but the technical indicators are signaling any bounce attempt could be weak on Monday.
Later this week we get bank quarterly earnings. If revenue and earnings easily beat estimates and the results from the same quarter last year, banks may lead the market higher. Until then we may see stocks trend sideways waiting for bank earnings.
Potential Economic and Political Market Moving Events
The main economic reports this week are on Thursday when we get the CPI numbers and Friday when the latest PPI numbers are released.
Monday:
3:00 Consumer credit is expected to $8 billion up from $5.2 billion