Weekend Stock Market Outlook

Stock Market Outlook entering the Week of September 25th = Mixed 

  • 20/50/200 Day Moving Averages: Mixed 
  • Price & Volume Action: Uptrend
  • Objective Elliott Wave Analysis: Uptrend

COMMENTARY
As expected, another volatile week for US stocks.  The Fed’s decision not to raise interest rates led to a rally, most notably in the tech/small cap sectors.  The markets aren’t out of the woods yet, so the outlook remains mixed, but a strong showing this week will prompt a change in market outlook.

The Nasdaq and Russell 2000 are leading the way, with both indexes above their 20, 50, and 200 day moving averages.  The NYSE/S&P500 are above their 50 day moving averages, but not their 20’s, reflecting the recent sell-off.  The DJIA ended last week below both its 20 and 50 day moving averages.  Since 3 of the 5 indexes closed below their 50-day, the outlook remains mixed from a moving average perspective.

2016-09-25 - US Stock Market Averages

2016-09-25 – US Stock Market Averages

No distribution day this Friday (except for the DJIA) as trading volume subsided verses Thursday.  And positive price/volume action on Wednesday and Thursday signaled that the uptrend is back.  That said, the count remains elevated, so a relatively small amount of institutional selling could derail the new uptrend.

OEW increased the odds of an uptrend to 80%.  As mentioned last week, this also means that the recent correction was the smallest in the last 10 years.  My hypothesis is a combination of quantitative easing and high frequency trading are increasing the magnitude and shortening the duration of sell-offs.

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Charts provided courtesy of stockcharts.com.

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of September 18th = Mixed 

  • 20/50/200 Day Moving Averages: Mixed 
  • Price & Volume Action: Mixed
  • Objective Elliott Wave Analysis: Mixed 

COMMENTARY
A wild week in the US stock markets.  We still don’t have a clear direction, as some stocks recovered while others continued to sell off.

With regard to moving averages, the Nasdaq recovered its 20 and 50 day moving averages, while the NYSE/S&P500/DJIA did not.  The Russell 2000 split the difference (recovered the 50, but not the 20).

2016-09-18 - US Stock Market Averages

2016-09-18 – US Stock Market Averages

Another Friday, another distribution day.  But don’t read too much into this one, as monthly and quarterly option expiration drove a lot of the trading volume.  Rather, keep in mind that the count is elevated over the past 4 weeks (30% for the Nasdaq, 40% for the S&P, NYSE, and DJIA), meaning large investors are in a selling mood.

OEW sees the start of a potential uptrend, which is supported by oversold levels on several indicators (Weekend Update).  However, a new uptrend would also mean that the recent correction was the smallest in the last 10 years.

In either case, (new uptrend or more downtrend), I’m expecting more volatility this week; the Federal Reserve meets Tuesday and Wednesday.

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Charts provided courtesy of stockcharts.com.

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of September 11th = Mixed 

  • 20/50/200 Day Moving Averages: Mixed 
  • Price & Volume Action: Mixed
  • Objective Elliott Wave Analysis: Mixed 

COMMENTARY
US stock indexes ran into a different type of Friday surprise last week; major selling across the board.  No sector was safe, and many leading stocks were hammered.

All of the major stock market averages blew through their 20-day moving averages, and 4 of the 5 closed below their 50-day averages as well. The Russell 2000 is just barely above that level. All remain above their 200 day averages. So a long-term uptrend remains intact, but also means prices will have to fall substantially before we get a long-term downtrend signal from the moving averages.

Candlestick charts for US Stock Market

2016-09-11-US Stock Market Averages

No surprise that Friday added another distribution day to the count.  The question for us (as individual investors)? Are institutions rebalancing their portfolios to lock-in profits since the Brexit vote, or are they taking money off the table and out of stocks?  Fortunately, the solution in either case is the same.  Limit your losses, and only buy when institutions are buying (i.e. don’t fight the market).

Friday also provided the second half of OEW’s 5% correction.  With many support levels now in play, there is no shortage of opportunities for the market to find its footing (Weekend Update).

One sell-off isn’t enough to completely reverse the market outlook, and we’re still within a stone’s throw of all time highs.  But add in weak price action over the past few weeks, and we’re definitely receiving mixed signals from the market, which supports a cautious approach.

If you haven’t already, check your holdings, tightening your stop orders to recent support levels, and take some profits if you’ve hit your targets.  As mentioned last week:

  • Growth strategy: Book your profits if they’re over 20%. Between 0% and 20%, check key support levels; if your profits will be wiped out before stock prices reach support, consider selling at least half your position.
  • Income strategy: check your position size and consider selling shares to if any one position has become too dominate (>5% of your total portfolio).  Verify that fundamentals are still strong (payout ratio, earnings per share, price/earnings ratio, etc.).

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Charts provided courtesy of stockcharts.com.

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of September 4th = Uptrend

  • 20/50/200 Day Moving Averages: Uptrend
  • Price & Volume Action: Mixed
  • Objective Elliott Wave Analysis: Uptrend

COMMENTARY
US stock indexes saw some selling last week; not enough to change the market outlook, but enough to create raise concern and uncertainty about future performance.

On the positive side, 3 of the 5 major stock market averages regained their 20-day moving averages due to Friday’s price jump, and all remain above their respective 50 and 200 day averages.

On the negative side, selling pressure continues to increase (the # of distribution days doubled last month). And Friday’s price gains were on low trading volume. The combination of higher volume selling and lower volume advances is a worrisome development as we head into September, but not enough to completely derail the current uptrend.

So far, we’ve only seen about half of the 5% correction expected by OEW. The latest analysis says that we may not see the full 5% may not materialize in the short-term (Weekend Update).

As mentioned last week, remember to watch your holdings.  Consider tightening your stop orders to recent support levels, or take some profits if you’ve hit your targets.

  • Growth strategy: Book your profits if they’re over 20%. Between 0% and 20%, check key support levels; if your profits would be wiped out before stock prices reached support, consider selling at least half your position.
  • Income strategy: check your position size and consider selling shares to if any one position has become too dominate (>5% of your total portfolio). Also, make sure the fundamentals are still strong (payout ratio, earnings per share, price/earnings ratio, etc.).
2016-09-04 - US Stock Market Averages

2016-09-04 – US Stock Market Averages

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Charts provided courtesy of stockcharts.com.

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of August 28th = Uptrend

MOVING AVERAGES:

  • Short-term (20 DMA): Mixed
    3 of the 5 major stock market averages fell below their 20-day moving averages.
  • Intermediate (50 DMA): Uptrend 
    All the major stock market averages remained above their 50-day moving averages.
  • Long-term (200 DMA): Uptrend 
    All the major stock market averages remained above their 200-day moving averages.

COMMENTARY
US stock indexes were down slightly last week, which is a bit concerning as trading volume also rose as stocks declined.  Prices reacted positively to Yellen’s statement about a strengthened case for a rate hike, and negatively to Fischer’s statement that a strengthened case meant two rate hikes this year.

Price/volume action deteriorated last week, as selling pressure increased and more distribution days were added to the count.  OEW analysis continues to state a 5% correction is likely near-term (Weekend Update).

As mentioned last week, remember to watch your holdings.  Consider tightening your stop orders to recent support levels, or take some profits if you’ve hit your targets.

2016-08-28 - US Stock Market Averages

2016-08-28 – US Stock Market Averages

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Price/volume charts are provided courtesy of stockcharts.com.

Moving Average Signals:

  • Uptrend=Market indexes remained above their moving average during the trading week
  • Downtrend=Market indexes remained below their moving average during the trading week
  • Buy signal=Market indexes rose above their moving averages during the trading week
  • Sell signal=Market indexes fell below their moving averages during the trading week
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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of August 21st = Uptrend

MOVING AVERAGES:

  • Short-term (20 DMA): Uptrend 
    All the major stock market averages remained above their 20-day moving averages.
  • Intermediate (50 DMA): Uptrend 
    All the major stock market averages remained above their 50-day moving averages.
  • Long-term (200 DMA): Uptrend 
    All the major stock market averages remained above their 200-day moving averages.

COMMENTARY
US stock markets continued to move sideways last week…a bit surprising given that Friday was an option expiration day.

All indexes remain above their moving averages.  Price/volume action is okay…not too many distribution days, and a lot of stocks digesting recent gains.  OEW analysis suggests a 5% correction is likely near-term (Weekend Update).

When leading stocks are extended, remember to watch your holdings.  Check your sell rules and consider taking some profits if you’ve hit your targets.  One example could be selling half your position if the stock is up 20% or more during the current rally.

The Fed’s annual gathering in Jackson Hole is this week (Thursday / Friday), which could create some volatility for those traders with itchy trigger fingers.

 

2016-08-21 - US Stock Market Averages

2016-08-21 – US Stock Market Averages

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Price/volume charts are provided courtesy of stockcharts.com.

Moving Average Signals:

  • Uptrend=Market indexes remained above their moving average during the trading week
  • Downtrend=Market indexes remained below their moving average during the trading week
  • Buy signal=Market indexes rose above their moving averages during the trading week
  • Sell signal=Market indexes fell below their moving averages during the trading week
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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of August 14th = Uptrend

MOVING AVERAGES:

  • Short-term (20 DMA): Uptrend 
    All the major stock market averages remained above their 20-day moving averages.
  • Intermediate (50 DMA): Uptrend 
    All the major stock market averages remained above their 50-day moving averages.
  • Long-term (200 DMA): Uptrend 
    All the major stock market averages remained above their 200-day moving averages.

COMMENTARY
Last week was fairly quiet, with the US stock market taking a break and moving sideways; The S&P 500 was up less than 0.1% for the week.

All indexes remain above their moving averages.

Price/volume action remains constructive, although the market did see stalling action on Tuesday last week (another form of distribution).  Leading stocks are maintaining their gains, but are also extended from proper buy points.

OEW analysis continues to signal an uptrend (Weekend Update).

2016-08-14 - US Stock Market Averages

2016-08-14 – US Stock Market Averages

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Price/volume charts are provided courtesy of stockcharts.com.

Moving Average Signals:

  • Uptrend=Market indexes remained above their moving average during the trading week
  • Downtrend=Market indexes remained below their moving average during the trading week
  • Buy signal=Market indexes rose above their moving averages during the trading week
  • Sell signal=Market indexes fell below their moving averages during the trading week
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