Prior Trading Day Summary:
Wednesday saw stocks collapse following hawkish comments from the Fed Chair Powell who indicated 2025 may see just two rate cuts rather than the anticipated 4 rate cuts. As well some investors and analysts felt his comments left open the possibility of having to raise rates in 2025. That was all it took to start the avalanche of selling. By the close the Dow Jones Index was down 2.5%, the NASDAQ down 3.5% and the SPX down 2.95%.
The S&P lost 178 points to close at 5872. The NASDAQ dropped 716 points to end the day at 19392.
Volumes jumped with over 10 billion shares traded on the NASDAQ and 5.4 billion on New York. 84% of stocks on the NASDAQ were falling by the close on Wednesday and 92% of all stocks on the SPX were falling.
With the market plunge many stocks are oversold but whether there is any kind of bounce is questionable.
Let’s review the technical indicators at the close on Wed Dec 18 2024 to see what to expect for Thu Dec 19 2024.
Stock Market Outlook: SPX Closing Chart For Wed Dec 18 2024
The index closed below the 21 and 50 day moving averages and the Lower Bollinger Band. This is bearish.
The closing candlestick is bearish for Thursday but also signals there is a chance for a bounce on Thursday to perhaps the 50 day moving average.
The 21 day moving average is lower at 6019. This is bearish.
The 50 day moving average is higher at 5922. The higher move is just 2 points and signals the plunge has turned the outlook bearish.
The 100 day moving average is rising and closed at 5778. The higher move is just 2 points and signals the plunge has turned the outlook bearish.
The 200 day moving average is in an uptrend and closed at 5524 which is bullish.
The Lower Bollinger Band is below the 50 day and turning lower which is bearish. The Upper Bollinger Band is turned sideways which is bearish.
The S&P chart is more bearish than bullish for Thursday.
SPX Stock Market Outlook review of Wed Dec 18 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and sharply negative., It is oversold.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Tuesday Dec 10 2024 . The down signal was stronger at the close on Wednesday.
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Ultimate Oscillator: The Ultimate Oscillator is falling and oversold.
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Slow Stochastic: The Slow Stochastic has a down signal.
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Relative Strength Index: The RSI signal is falling sharply and oversold.
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Rate of Change: The rate of change signal is falling and oversold. It is signaling Thursday will end lower.
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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 light support |
| 5900 is light 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 Thu Dec 19 2024
For Thursday the index is oversold and a bounce may be likely but the market may need more than a day to attempt any kind of rebound that could hold. The index broke through a number of technical support levels on Wednesday ending at 5872. This broke the 5950, 5900 and 5890 support levels. An early bounce might see the SPX touch 5900 but a dip could take the index to 5875 or 5850 which is better support.
As well Micron Technology Stock (MU) sold offer after hours on the back of disappointing forward guidance which was lowered. This is bound to weigh on the markets at the open and semiconductor stocks in particular.
For Thursday watch for a possible bounce but it probably won’t hold. I may buy SPY put options again if there is an early bounce on Thursday. The day looks poor following Wednesday’s collapse and a lower close seems likely.
Potential Economic and Political Market Moving Events
Monday:
8:30 Empire State manufacturing survey was much worse than expecting coming in at just 0.2 versus 31.2 prior.
9:45 S&P flash US service PMI rose to 58.5 rather than slipped.
9:45 S&P flash US manufacturing PMI slipped more than estimated to 48.3 from 49.7 prior
Tuesday:
8:30 Retail sales came in higher than estimated at 0.7%
8:30 Retail sales minus autos came in lower than expected at 0.2%
9:15 Industrial production was lower than estimated at 0.1%
9:15 Capacity utilization was lower than estimated at 76.8% 77.2% from 77.1% prior
10:00 Home Builder Confidence index was unchanged at 46
Wednesday:
8:30 Housing starts came in a lot lower than estimated at 1.29 million.
8:30 Building permits were higher than estimated at 1.51 million.
2:00 FOMC interest rate announcement
3:40 Fed Chair Powell news conference
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims are estimated to drop to 230,000 from 242,000 prior
8:30 GDP for third quarter is estimated at 2.9%
8:30 Philadelphia Fed manufacturing survey is estimated to rise to 2.5 from -5.5
10:00 Existing home sales are estimated to rise to 4.1 million from 3.96 million prior
10:00 Leading economic indicators are estimated to rise to -0.1% from -0.4%