Stock Market Outlook for Thu Dec 14 2023 – Overbought and Higher

Prior Trading Day Summary:

On Wednesday the Fed decision to not raise interest rates further plus very dovish comments in the Fed’s press conference sent stocks soaring.

The day ended with the Dow Jones Index closing at an all-time high of 37,090.

The S&P ended up 1.3% for a 63 point gain and a new 52 week closing high of 4707. The index is now just 111 points away from its all-time high made Jan 4 2022 of 4819.

The NASDAQ ended higher by 1.3% for a 200 point gain and a close at 14,734. For 2023 the index is up 38.7%. The all-time high was November 22 2021 when the index reached 16,212.

Trading volume jumped as many bears threw caution to the wind and rushed into stocks. New York saw 5.2 billion shares traded and the NASDAQ saw 7.1 billion shares trade hands.

Let’s review the closing technical indicators from Wed Dec 13 2023 to see what to expect for Thu Dec 14 2023.

Stock Market Outlook: SPX Closing Chart For Wed Dec 13 2023

The index closed above all major moving averages and above the Upper Bollinger Band. This is bullish.

The 21 day moving average is rising further, which is also bullish.

The closing candlestick is bullish for Thursday and signaling the rally is overbought but more upside should be expected.

The 50 day moving average is at the 100 day and should move above it on Thursday for another up signal.

The 100 and 200 day moving averages are climbing which is bullish.

The Lower Bollinger Band is rising sharply and closed on Wednesday above the 100 day moving average for a fourth day. A Bollinger Bands Squeeze is underway which is pointing to stocks moving higher out of this squeeze.

The S&P chart is more bullish but also signaling overbought at present. Any dip would be an opportunity to setup new trades.

Stock Market Outlook review of Wed Dec 13 2023

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Thu Dec 14 2023 

On Wednesday the Producer Price Index numbers were below estimates. This set the background for the Fed’s announcement of no interest rate increase but instead the talk turned to how soon the Fed could cut interest rates.

For Thursday the day starts with another new support level at the 4590 valuation. You can see this in the support and resistance section above.

With the last FOMC meeting of the year behind investors, any dips are worth considering for setting up further trades.  While the index is now overbought, the outlook remains still higher for Thursday.

Thursday will see a dip back below 4700 in the morning but the path higher has few restrictions at present. Thursday will see the indexes higher.

Potential Economic and Political Market Moving Events

Major economic events this week are Consumer Price Index readings on Tuesday, the Producer Price Index from Wednesday and the latest FOMC interest rate decision also on Wednesday.

Monday:

There are no economic events that will impact markets.

Tuesday:

8:30 Consumer price index was expected to be unchanged at 0.0% but came in at 0.1%

8:30 Core CPI rose slightly to 0.3% from 0.2%

8:30 CPI year-over-year did dip to 3.1% from 3.2% as expected

8:30 Core CPI year-over-year was unchanged at 4.0%

2:00 Monthly federal budget came in worse than expected at $-314 billion.

Wednesday:

8:30 Producer price index was expected to rise to 0.1% but came in at 0.0%

8:30 Core PPI was expected to rise to 0.2% but came in unchanged at 0.1%

8:30 PPI year-over-year was expected to be unchanged at 1.3% but came in lower at 0.9%

8:30 Core PPI year-over-year was expected to be 2.9% but came in at 2.5%.

2:00 FOMC decision on interest rates

2:30 Fed Chair press conference

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are expected to come in at 220,000

8:30 Import price index is expected to be unchanged at -0.8%

8:30 Retail sales are expected to be unchanged at -0.1%

10:00 Business inventories are expected to drop to -0.1%