Stock Market Outlook for Thu Oct 17 2024 – Taiwan Semiconductor and Netflix Earnings – Weakness

Prior Trading Day Summary:

On Wednesday we saw a bounce back rally but without large volumes as weakness continued on Wednesday.

The S&P closed up 27 points recovering 60% of Tuesday’s sell-off. Volume dropped to 3.5 billion shares traded, down 500 million shares from Tuesday. 74% of all stocks were rising.

The NASDAQ rose 51 points for a 27% recovery of Tuesday’s loss. Volume dropped 1.3 billion shares to 5.4 billion shares traded. 72% of all stocks were rising.

Let’s review the technical indicators from Wed Oct 16 2024 to see what they expect for Thu Oct 17 2024.

Stock Market Outlook: SPX Closing Chart For Wed Oct 16 2024

The index rose on Wednesday recovering 60% of Tuesday’s sell-off. The index closed above the 21 day moving average but below the Upper Bollinger Band.

The closing candlestick is bearish.

The 21 day moving average is higher at 5746. This is bullish.

The 50 day moving average is higher at 5618. This is bullish.

The 100 day moving average is rising and closed at 5524 which is bullish.

The 200 day moving average is in an uptrend and closed at 5290 which is bullish.

The Lower Bollinger Band is above the 50 day moving average and climbing. The Upper Bollinger Band is turning higher. The latest Bollinger Bands Squeeze is sending stocks higher.

The S&P chart is bullish for Thursday but the closing candlestick is signaling a lower day should be expected, that Tuesday’s sell-off still has more to go.

SPX Stock Market Outlook review of Wed Oct 16 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Thu Oct 17 2024 

For Thursday two big name stocks are important. In the morning before the open, Taiwan Semiconductor (TSM) reports their latest quarterly result. An earnings miss will send the semiconductor sector lower, especially after ASML’s decline on Tuesday. The other stock of consequence is Netflix (NFLX) which reports after the close. An earnings miss or declining memberships will impact stocks on Friday.

The technical indicators have also weakened and the rally on Wednesday was not strong enough to turn the majority of technical indicators back to up.

I used Wednesday to place a few trades but I also closed a number of profitable trades to take advantage of the rally. If I am wrong and stocks do not pullback I can always place trades again. But if I am right and we get some weakness, I have more capital available after Wednesday’s trading, to place in new trades.

ALso on Thursday we get the latest Weekly Initial Unemployment Insurance Claims which are now estimated to rise to 260,000. We also get retail sales, industrial production, business inventories and home builder confidence. Any of these could have a minor impact on the market direction on Thursday but the Weekly Initial Unemployment Insurance Claims and retail sales are the main ones to watch.

I am expecting a choppy day with some dips and weakness.

Potential Economic and Political Market Moving Events

Monday:

No reports

Tuesday:

8:30 Empre State manufacturing survey came in worse than expected at -11.9, well below estimated of 3.0 and the prior reading of 11.5

Wednesday:

8:30 Import price index was lower than estimated at -0.4%

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are estimated to rise to 260,000

8:30 Retail sales are estimated to rise 0.3%

9:15 Philadelphia Fed manufacturing index is expected to rise to 3.0 from 1.7

9:15 Industrial Production is expected to fall -0.2% from 0.8%

9:15 Capacity Utilization is estimated to slip slightly to 77.8% from 78.0%

10:00 Business inventories are estimated to have slipped to 0.3% from 0.4%

10:00 Home builder confidence index is expected to rise slightly to 42 from 41