Weekend Stock Market Outlook

Stock Market Outlook entering the Week of January 24th = Uptrend

    • ADX Directional Indicators: Uptrend
    • Price & Volume Action: Uptrend
    • Elliott Wave Analysis: Uptrend

ANALYSIS

The stock market outlook remains in an uptrend and recovered a bit of strength last week.

Technical analysis of daily SPX prices

2021-01-24-SPX Trendline Analysis-Daily

The S&P500, ($SPX) sits in the middle of a rising price channel, maintaining a fairly constant gap to the 50 and 200 day moving averages since November.

The ADX reading is on the rise (a bullish sign), although the absolute value remains below the threshold for strong trends…not surprising considering the narrow price channel in place.

Technical analysis of daily SPX prices

2021-01-24-SPX Elliott Wave Analysis-Daily-Primary1

Elliott Wave remains in an uptrend; the next correction likely takes the S&P back to the 3550-3600 support levels. By the time that happens, I’d guess the support trendline and the 200-day moving average will be near that level as well.

COMMENTARY
Another week, another round of quarterly earnings reports; a little over 20% of the S&P500 to be inexact. Good or bad, market prices are at historical extremes. Check out this chart from John Mauldin, courtesy of Doug Kass:

S&P500 Valuations https://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_5_20210122_TFTF.png

That’s not to say prices can’t go higher…just that the hamburgers are expensive, to reference a Buffett euphemism. For me, it means great trading opportunities are ahead, but relatively poor investing opportunities. Be ruthless when pruning your money tree; now is definitely NOT the time to be in love with your holdings (not that there is ever a good time for that).

Best to Your Week!

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of January 17th = Uptrend

    • ADX Directional Indicators: Uptrend
    • Price & Volume Action: Uptrend
    • Elliott Wave Analysis: Uptrend

ANALYSIS

The stock market outlook remains in an uptrend, albeit a weakening one.

Technical analysis of daily SPX prices

2021-01-17-SPX Trendline Analysis-Daily

The S&P500, ($SPX) closed its gap to the 200-day moving average, but still sits more than 10% above that level. Price found some support at the bottom of a potential channel on Friday.

The ADX continues to show a bullish trend, but that trend has weakened since December. With a reading under the 20-25 range, there isn’t much of a trend to follow anyway. And we picked up two distribution days in succession last week; not enough to change the signal, but not the best price action either.

Technical analysis of daily SPX prices

2021-01-17-SPX Elliott Wave Analysis-Daily-Primary1

Elliott Wave also remains in an uptrend, though some analysts think we may have just completed a minor wave, given the divergence in the RSI and the MACD histogram inflection/cross-over.

COMMENTARY
It’s that start of earnings season, which should make some some interesting price action over the next few weeks.

The incoming Biden administration released a $1.9 trillion fiscal-stimulus plan, and not a moment too soon, as jobless claims are coming in higher than anticipated. Other headwinds include a slower than anticipated vaccine rollout and an increase is COVID cases after the holiday season.

A short week on tap, with U.S. markets closed on Monday in observance of Martin Luther King Day.

Best to Your Week!

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of January 10th = Uptrend

    • ADX Directional Indicators: Uptrend
    • Price & Volume Action: Uptrend
    • Elliott Wave Analysis: Uptrend

ANALYSIS

The stock market outlook remains in an uptrend.

Technical analysis of daily SPX prices

2021-01-10-SPX Trendline Analysis-Daily

Price remains extended from the 200-day moving average (~14.5%), as it has for the past 9 weeks or so.

But all three signals (ADX, Price / Volume, and Elliott Wave) show an uptrend for the S&P500 ($SPX). The ADX crossed over briefly when the market sold off at the start of the week.

Technical analysis of daily SPX prices

2021-01-10-SPX Elliott Wave Analysis-Daily-Primary1

Technical analysis of weekly SPX prices

2021-01-10-SPX Trendline Analysis-Weekly

COMMENTARY
The December jobs reports showed the first monthly loss since April, resulting from new lockdowns and restrictions from the holiday surge in new coronavirus cases. Democrats won the Georgia runoff elections, leaving the party in control of the White House and Congress.

I, along with many others, am still processing the other debacle we witnessed last week. While the impact of the event on markets was minimal, a deep political divide still exists within the U.S.. So there will likely be more unrest (as we saw throughout 2020) as we work through it. But work through it we will.

Best to Your Week!

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of January 3rd = Uptrend

    • ADX Directional Indicators: Uptrend
    • Price & Volume Action: Uptrend
    • Elliott Wave Analysis: Uptrend

ANALYSIS

The stock market outlook starts 2021 in an uptrend.

All three signals (ADX, Price / Volume, and Elliott Wave) show an uptrend for the S&P500 ($SPX).

Happy New Year and Best to Your 2021!

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of December 27th = Uptrend

    • ADX Directional Indicators: Uptrend
    • Price & Volume Action: Uptrend
    • Elliott Wave Analysis: Uptrend

ANALYSIS

The stock market outlook remains in an uptrend heading into the last few days of 2020.

Technical analysis of daily SPX prices

2020-12-27-SPX Trendline Analysis-Daily

All three signals (ADX, Price / Volume, and Elliott Wave) show an uptrend in place for the S&P500 ($SPX), though the uptrend did appear to weaken last week. The ADX almost crossed over, we’ve collected a moderate number of distribution days, and price is still extended from the 200-day moving average (~13%).

COMMENTARY

The U.S. congress passed a relief bill, which now sits in limbo as it awaits the President’s signature (or veto). And a Brexit deal was reached. Vaccinations continue to increase and provide confidence in a return to normalcy, but a new variant of the virus resulted in U.K. travel bans and infections continue to accelerate.

Another shortened trading week on tap, with the U.S. markets closed on Friday on New Years Day.

Best to Your Week!

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of December 20th = Uptrend

    • ADX Directional Indicators: Uptrend
    • Price & Volume Action: Uptrend
    • Elliott Wave Analysis: Uptrend

ANALYSIS

The stock market outlook remains in an uptrend to kick-off the week of Christmas.

Technical analysis of daily SPX prices

2020-12-20-SPX Trendline Analysis-Daily

The S&P500 ($SPX) remains in an uptrend, based on all three signals (ADX, price & volume, and Elliott Wave. Price remains very extended from the 200-day moving average (~16% now).

Technical analysis of daily SPX prices

2020-12-20-SPX Elliott Wave Analysis-Daily-Primary1

Elliott Wave hasn’t changed much in the recent weeks; remains in an uptrend.

COMMENTARY

Representatives in the U.S. are trying to finalize the details of a stimulus package. An agreement likely buoys the market in the coming week. But longer term, economic data shows the “recovery” is slowing (e.g. lower retail sales and job growth) as coronavirus cases continue to increase, along with the number of restrictions.

The stock market has largely shrugged off these concerns. It doesn’t hurt that the Fed continues to provide support. Last week, they announced that they’ll continue to buy $100 billion in assets per month and keep interest rates low, until inflation and employment increase.

A shortened trading week on tap, with the U.S. markets closing early on Thursday and remaining closed Friday in observance of Christmas.

Best to Your Week!

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of December 13th = Uptrend

    • ADX Directional Indicators: Uptrend
    • Price & Volume Action: Uptrend
    • Elliott Wave Analysis: Uptrend

ANALYSIS

The stock market outlook remains in an uptrend, despite the small sell-off last week.

Technical analysis of daily SPX prices

2020-12-13-SPX Trendline Analysis-Daily

The S&P500 ($SPX) is still extended from the 200-day moving average (~13%). But uptrend signals remain in place for both ADX directional indicators and price/volume action.

Technical analysis of daily SPX prices

2020-12-13-SPX Elliott Wave Analysis-Daily-Primary1

Elliott Wave remains in an uptrend.

COMMENTARY

In the U.S., elected officials can’t find common ground for another round of fiscal stimulus, and the unemployment situation is deteriorating as coronavirus cases spike. The E.U., Brexit talks continue, but both sides have hedged, stating that a no-deal Brexit is likely.

And the overall stock market remains very over-valued (CMG blog), on both a Price to Earnings and Market Cap to GDP basis.

None of that has stopped the markets as they march higher, led by small capitalization stocks. Typically, small caps don’t lead markets higher during bear markets, or even late stage bull markets. And cyclical companies, like energy and financials, have also performed well, signaling an expectation of further economic recovery.

Keep working your plan, raise your sell stops to protect against a sudden drawdown, and try to enjoy the holidays.  We’ve all earned it!

Best to Your Week!

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