Prior Trading Day Summary:
On Wednesday investors were disappointed that the Fed clearly indicated March was not going to see an interest rate cut. With most analysts and the majority of investors expecting a rate cut in March, the Fed’s comments disappointed and investors sold the markets lower.
The day ended with the SPX down 79 points closing at 4845. Volume jumped to 4.7 billion but there were only 28 new 52 week lows and still 179 new highs. Even with 80% of all volume being traded to the downside, there were signs that the selling was overdone.
The NASDAQ closed down 345 points ending the day at 15,164. Volume spiked to 6 billion shares traded for the highest single volume day since Jan 16. New lows rose to 130 with 69% of all stocks falling. New highs were cut in half from Tuesday’s close with 132 new highs.
Let’s review Wednesday’s closing technical indicators to see what to expect for Thu Feb 1 2024.
Stock Market Outlook: SPX Closing Chart For Wed Jan 31 2024
The index closed below the Upper Bollinger Band and near the 21 day moving average for a bearish signal.
The 21 day moving average is moving higher which is bullish. It is at the 4800 valuation.
The closing candlestick is bearish for Thursday.
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 above the 4400 on the SPX which is bullish.
The Lower Bollinger Band is falling below the 50 day moving average but the Upper Bollinger Bandis turning sideways after Wednesday’s sell-off. This is bearish.
The S&P chart is still more bullish than bearish for Thursday.
Stock Market Outlook review of Wed Jan 31 2024
Stock Market Outlook: Technical Indicators Review
Momentum: Momentum is falling and positive.
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MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued an up signal on Tue Jan 23 2024. On Wed Jan 31 2024 the up signal was almost gone.
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Ultimate Oscillator: The Ultimate Oscillator is falling and negative.
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Slow Stochastic: The Slow Stochastic has a down signal in place and is overbought.
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Relative Strength Index: The RSI signal is falling and negative.
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Rate of Change: The rate of change signal is falling and positive. It is signaling a lower day for Thursday.
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Stock Market Outlook: Support and Resistance Levels |
| 4950 is resistance |
| 4925 is resistance |
| 4915 is resistance |
| 4900 is resistance |
| 4875 is resistance |
| 4850 is resistance |
| 4825 is resistance |
| 4815 is resistance |
| 4800 is resistance |
| 4780 is support |
| 4750 is support |
| 4720 is support |
| 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 Thu Feb 1 2024
For Thursday the technical indicators have shifted to negative and all are pointing to a lower move for the SPX. Qualcomm Stock (QCOM) rose after hours on Wednesday following their latest earnings release which beat all estimates. However the stock is not large enough to impact the S&P direction. At the close on Thursday we get earnings result from Apple Stock (AAPL), Amazon.com Stock (AMZN) and Meta Stock (META) which will have the most impact on the market.
For Thursday expect a bounce attempt after the selling on Wednesday was overdone but weakness has entered the rally and earnings from Microsoft Stock (MSFT) were not enough to support the rally to move higher on Wednesday. With the outlook for Amazon.com Stock (AMZN) and Apple Stock (AAPL) being lower after earnings, staying cautious on Thursday is probably worth considering until we see how the market moves at the end of the week.
Historically the first day of February has been higher 79% of the time since I have kept records from 1974.
Potential Economic and Political Market Moving Events
There are many events this week that could impact stocks, in particular the Fed on Wednesday and the Non-Farm Payroll report on Friday. Monday is the only day with no reports. That could support the bulls.
Monday:
No reports are expected
Tuesday:
9:00 Case-Shiller home price index is expected to rise to 5.7% but rose to 5.4%
10:00 Job openings are expected to be unchanged at 8.8 million but rose to 9 million continuing to show a strong labour market.
10:00 Consumer confidence is expected to rise to 115 but it dipped slightly to 114.8
Wednesday:
8:15 ADP employment is expected to come in at 150,000 but came in at 107,000 far lower than expected
2:00 Fed interest rate-decision is expected to hold rates steady
2:30 Fed Chair Powell’s press conference which could be the main market moving event for Wednesday.
Thursday:
8:30 Weekly Initial Unemployment Insurance Claims are expected to come in at 214,000
8:30 Productivity is expected to com,e in a 2.5% for the fourth quarter.
9:45 Manufacturing PMI is expected to be 50.1
10:00 ISM manufacturing is expected at 47.2%
10:00 Construction spending is estimates at 0.5%
Auto sales some time during the day are expected to be 15.2 million