Upcoming Jobs and Inflation Reports Could Sway Momentum
The stock market pulled back from fresh all-time and monthly highs on Friday as the bulls and bears split the week. Tech and the broader indexes pulled back while the blue-chips and small-caps got weekly wins.
This week could be just as exciting with key economic news and corporate earnings scattered throughout the week. Good news, or bad, could sway momentum into yearend, and possibly into mid-January.
The Nasdaq tagged a low of 23,094 while settling at 23,195 (-1.7%). Support at 23,000 held. Resistance is at 23,500.
The S&P 500 ended at 6,827 (-1.1%) with the low reaching 6,801. Support at 6,800 was challenged and held. Resistance is at 6,900.
The Dow hit a record high of 48,886 before finishing lower at 48,458 (-0.5%). Undefined resistance at 49,000 held. Support is at 48,000.
Earnings and Economic News
Before the open: MindWalk (HYFT)
After the close: Champions Oncology (CSBR), Navan (NAVN)
Economic News
Empire State Manufacturing Survey – 8:30am
Home Builder Confidence Index – 10:00am
Technical Outlook and Market Thoughts
For the week, the Nasdaq was down 1.6% and S&P slipped 0.6%. The Russell and the Dow were both up 1%. Year-to-date, the Nasdaq has jumped 20.1% and the S&P has rallied 16.1%. The Dow is higher by 13.9% and the Russell has zoomed 18% for 2025.
The ongoing strength to all-time highs and higher monthly peaks last week were bullish signals from the continuation rally from the start of Thanksgiving week. However, Friday’s sloppiness in the S&P 500 and the Nasdaq were a slight concern, especially with the latter index cracking its 50-day moving average.
There are a couple of economic reports that could impact trading on Tuesday and Thursday with the November jobs report and November inflation data due out, respectively. The charts are showing a clear break above fresh and prior resistance levels could lead to continued strength and additional round, psychological numbers.
There are set at Dow 50,000; S&P 7,000; Nasdaq 25,000; and Russell 2,650-2,700. These are also our Price Targets from October of this year and for the blue-chips, it represents our February 2024 Price Target. As the bull run continues to mature, it always makes it a tad harder to call a market peak but there is more upside to the aforementioned Price Targets if fresh support levels hold.
The Russell 2000 kissed a fresh record high of 2,595 with our October 8th Price Targets at 2,600-2,650 firmly in focus. Continued closes above the latter could lead to a blue-sky run towards 2,700-2,750. The current rally represents an 11% gain from the November 20th low at 2,303.
New support is at 2,525-2,500 with the latter representing our February 2024 Price Target for the index. Closes below 2,475-2,450 and the 50-day moving average would indicate a near-term top with weakness towards 2,425-2,400.
The Nasdaq hovered around 23,500 and key resistance for nine-straight sessions before Friday’s breakdown from the opening bell. Multiple closes above this level keeps upside towards 24,000-24,500 in the picture.
Upper support at 23,250-23,000 failed to hold on the fade to 23,094 afterwards. Closes below the latter and the 50-day moving average would be a renewed bearish signal with retest potential down to 22,500-22,000.
The S&P 500 stayed near 6,900 for three-straight sessions before fading and now key resistance. Upside to 6,950-7,000 and our raised Price Target from October 3rd would be back back in the picture if 6,850 can be recovered this week.
Support is at 6,800-6,750. Closes back below the latter and the 50-day moving average would imply a near-term top with further weakness down to 6,700-6,600.
The Dow pushed undefined and lower resistance at 49,000-50,000 on Friday’s pop to a lifetime high of 48,886. The index is up 7% from last month’s low at 45,728. Our Price Target from February 2024 for the Dow remains at 50,000.
Support is at 48,250-48,000. Closes below the latter would suggest a retest to 47,250-47,000 and the 50-day moving average.
The Volatility Index (VIX) stretched key resistance at 17.50 with Friday’s late session top at 17.85. The 50-day moving average is basically at 18.50 and the 200-day moving average is just below 20 at 19.50. These levels are additional layers the bears must get through to sway market direction.
Key support remains at 15 with the session low at 14.85 in back-to-back sessions to close out the week. The August 28th low reached 14.12. Closes below these two levels would likely get 13.50-12.75 and last December lows in the picture.
High profile earnings for the week include Lennar (LEN) on Tuesday and Micron (MU) on Wednesday. CarMax (KMX) and Darden Restaurants (DRI) will report ahead of Thursday’s open while FedEx (FDX) and Nike (NKE) announce after the close. Carnival (CCL) and Conagra Brands (CAG) will update Wall Street with their numbers ahead of Friday’s open.
Futures were green on Sunday evening as we went to press. Nasdaq futures were up 55 points; the Dow futures were up 127. S&P 500 futures were higher by 17 points and the Russell futures up a 10 ticks.
