Weekend Stock Market Outlook

Stock Market Outlook entering the Week of November 11th = Downtrend

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

COMMENTARY
Investors like the results of mid-term elections in the US.  No political party in total control usually results in gridlock, which mean businesses focus on business.  Investors didn’t like the outcome from the Fed meeting as much, with likely rate increase in December and expectations for 3 more in 2019.

With the exception of the Dow Jones Industrials, all the indexes continue to trade below their 20 and 50 day moving averages, so no signal change yet.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-11-11 – US Stock Market Averages

The price/volume signal confirmed an uptrend last week as the indexes jumped back above their 200 day moving averages.  Trading volume wasn’t REALLY great and we’re still below the 50-day moving averages for the most part.  So it appears to be more of a recovery rally after the fierce selling, reminiscent of earlier this year, rather than a new bull market.

OEW called for a probable uptrend, within the overall downtrend.  The expectation is for the S&P to sell off a bit to ~2,700, rally higher, then fall again towards 2,400.

The S&P ($SPX) cleared the 200 day moving average, but then ran into resistance around 2800.

2018-11-11 - SPX Technical Analysis - Daily

2018-11-11 – SPX Technical Analysis – Daily

Participate. Protect. Prepare.


If you find this research helpful, please tell a friend. If you don’t find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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 November 4h = Downtrend

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

COMMENTARY
Prices for U.S. stocks bounced and indexes finished up for the week.  With midterm elections Tuesday, it’s anyone’s guess how investors and traders will respond when the votes are tallied.  And we have a Fed meeting this week.

All the indexes continue to trade below their 20 and 50 day moving averages, keeping this signal in a downtrend.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-11-04 – US Stock Market Averages

The price/volume signal remains in a downtrend.  Now that the indexes have rallied a bit, start looking for a follow-through day (1.5% gain on higher than average trading volume), which would change this signal back to an uptrend.  Thursday was close, but couldn’t pull through.

OEW maintains a downtrend signal, but:

the decline from SPX 2941 to 2604 might have ended the first downtrend…and a potential…uptrend is now underway.

The S&P ($SPX) appears to have bottomed just above 2600.  On Friday, prices tested the 200 day moving average.

2018-11-04 - SPX Technical Analysis - Daily

2018-11-04 – SPX Technical Analysis – Daily

Last week we mentioned a change in the character of the market, in terms of volatility.  I received an email asking how to visualize that “change”.  Many people use the VIX (see above).  But if you’re looking for something more specific to the index or stock you’re following, try the Average True Range indicator; I actually calculate within one of my mechanical trading systems.

2018-11-04 - SPX Technical Analysis - Weekly

2018-11-04 – SPX Technical Analysis – Weekly

My opinion is still that the SPX will test support around 2581, but now it appears it will claw back some of the decline first.  We could even see 2875 before selling off again.  I imagine the price action could look similar to what occurred between the February and April lows.

Again, use your process to determine what and when to buy or sell.  Per OEW:

…the four major US indices have not confirmed bear markets yet. We may not see a bear market confirmation in the US until the bear market is nearly over. That’s what happened in 2016, and is part of the reason we were caught off guard at that low.

Participate. Protect. Prepare.


If you find this research helpful, please tell a friend. If you don’t find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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 October 28th = Downtrend

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

COMMENTARY
The 200 day moving average was the latest support level to fall in what is a REALLY red October.  The only good news seems to be that everyone thinks the markets are way oversold and should bounce from the current levels.  But isn’t the consensus usually wrong?  Remember to follow your buy and sell rules, not the talking heads. When the selling is over, there will be great buying opportunities.

All the indexes continue to trade below their 20 and 50 day moving averages, keeping this signal in a downtrend.

2018-10-28 - US Stock Market Averages

2018-10-28 – US Stock Market Averages

Since prices continue to fall on higher than average volume, the price/volume signal remains in a downtrend too.

OEW also continues with a downtrend signal.  They’re also stating that we’re very oversold, and expect a brief rally in the near term.

The S&P ($SPX) fell well below the 200 day moving average last week.  The character of the US markets has shifted during October and from the chart you can clearly see the old adage in action; prices take the stairs on their way up and the elevator on their way down.  More than likely we’ll see a test of the April low price level within the next two weeks or so.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

Expanding the view, you can see that January 2016 was last time the SPX closed substantially below the 200 day / 40 week moving average.  At some point, the lower stock prices will bring in big institutions…so watch for trading volume cues.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-10-28 – SPX Technical Analysis – Weekly

I took my own advice and checked my watch list.  It wasn’t pretty.  But there are a few names that have held up well, relative to the overall market.  And those names are the ones I’m watching closely for signs that the selling is complete.

Participate. Protect. Prepare.


If you find this research helpful, please tell a friend. If you don’t find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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 October 21st = Downtrend

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

COMMENTARY
We start this week sitting on a small, fledgling recovery within a downtrend.  The 200 day moving average provided some level of support, but it’s not clear if this is the start of a rally or a pause in the downtrend.

All the indexes kick things off below their 20 and 50 day moving averages, keeping this signal in a downtrend.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-10-21 – US Stock Market Averages

The downtrend remains from a price/volume perspective, as leading stocks continue to get trounced and prices continue to fall on higher than average trading volume.

OEW remains in a downtrend.  They expected a 250 point decline, followed by a 50% retracement, and then another decline to lower lows.  Last week, we recovered just under 50% of the first drop (~110 of the 230 points).

2018-10-21 - SPX Technical Analysis - Daily

2018-10-21 – SPX Technical Analysis – Daily

The S&P ($SPX) found support at the 200 day moving average during the week, but didn’t progress much from that level either.  If that level doesn’t hold, a trip below 2600 is likely (losses of another 6% or so).

2018-10-21 - SPX Technical Analysis - Weekly

2018-10-21 – SPX Technical Analysis – Weekly

Now is not the time to go all in; we need some positive developments first.  But take a look at your watch list and see what’s holding up reasonable well in the midst of the sell-off.  Those are likely the names that will lead the market higher when it turn around.

Participate. Protect. Prepare.


If you find this research helpful, please tell a friend. If you don’t find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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 October 14th = Downtrend

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

COMMENTARY
Ugly. Yes, we’ve grown accustom to low volatility. And yes, we’ve been seeing and discussing some potential warning signs of the past few weeks. But there’s just no way around it…last weeks price drop was ugly. The only silver lining was Friday’s price action, and even that wasn’t enough to change the inevitable: a trend change from uptrend to downtrend.

All the indexes start the week below their 20 and 50 day moving averages, putting this signal in a downtrend.  The Russell 2000 and NYSE are below their 200 day moving average as well (!), while the S&P, NASDAQ, and DJIA found some support at that level during Friday’s trading session.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-10-14 – US Stock Market Averages

Big percentage sell-offs on high trading volume and weakness in leading stocks shifts the price/volume signal to a downtrend as well.

OEW puts us in a downtrend too.  Per their analysis, the bull market that started in 2016 is over, and we’re going to see our first bear market in some time.

 We are now expecting a shallow 15% to 20% bear market lasting several months into next year.

The good news?  Peak to trough, we’ve already seen ~8.5% (or 230 points) of that decline.   Again, from OEW:

In recent years all the selloffs, (2011, 2015/2016, and 2018) have been quite similar…About a 250+ point decline, a 50% retracement, and then a lower low.

Technically speaking, the S&P ($SPX) took out most of the near-term support levels last week; the 50 day moving average, the January high, and the lower trendline of the price channel.  It’s currently testing the 200 day moving average. The ADX broke out, clearly showing the negative trend in firm command.

2018-10-14 - SPX Technical Analysis - Daily

2018-10-14 – SPX Technical Analysis – Daily

Moving to the longer term view, the S&P broke the trendline that has acted as support all the way back into 2016. This development supports the OEW viewpoint about the end of our 2016 bull market.

2018-10-14 - SPX Technical Analysis - Weekly

2018-10-14 – SPX Technical Analysis – Weekly

Now we wait to see if the 200 day can provide support like it did in February and April.  Usually a dramatic sell-off is followed by a decent rally…one could argue that started on Friday.  And we’re starting Q3 earnings season, which could bolster prices…as long as trade wars and tariffs aren’t used to revise future earnings expectations downward.

Given the fast and furious selling, I’m expecting some additional price recovery in the near term, which I plan to use to my advantage before we head lower again…maybe back to the February low. 

Participate. Protect. Prepare.


If you find this research helpful, please tell a friend. If you don’t find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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 October 7th = Uptrend

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

COMMENTARY
Well that didn’t last long; the good times didn’t even make it through the first week of October!  The selloff on Thursday and Friday put a dent in our current rally.  We’re definitely seeing weakness in the specialized indexes (Nasdaq for technology or the Russell2K for small caps).  Two signal changes this week, but the overall market outlook remains in an uptrend for now.  A shift to a downtrend signal from either price/volume or OEW would put 2/3 signals in the red and shift the market outlook from uptrend to downtrend.  But the S&P is still within the April/May price channel and hasn’t broken key support levels, so the uptrend isn’t finished…yet.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-10-07 – US Stock Market Averages

The Nasdaq followed the Russell 2000 lower, falling below it’s 50-day moving average.  The NYSE sits just below its own 50 day.  The S&P500 sits between the 20 and the 50, having found some support at the latter.  Only the Dow Jones is above it’s 20 and 50.  With 3 of the 5 market averages below their 20 and 50-day moving averages, the moving average signal changes to a downtrend.

From a price/volume perspective, we’re no longer in an outright uptrend or downtrend.  A few indexes are below their 50 days, and the distribution day count remains elevated.  Specifically for the S&P, price is still above the 50-day, and distribution days are low.  So this signal shifts from uptrend to mixed.

Continuing last week’s theme, OEW says we’re in the last innings of an uptrend, expecting one last gasp to higher highs before a true correction takes hold.

The S&P ($SPX) continued to retreat from the price upper channel, but appeared to find support on Friday, after testing key support levels (both the January high and 50-day moving average).  If we continue lower this week, the next stop is the lower price channel.

2018-10-07 - SPX Technical Analysis - Daily

2018-10-07 – SPX Technical Analysis – Daily

The ADX continues to meander around under the “20” level.  The DI- overtook the DI+ after the late week sell off, but still no definitive signal either way.

2018-10-07 - SPX Technical Analysis - Weekly

2018-10-07 – SPX Technical Analysis – Weekly

Longer term, we’re going to see whether institutions think it’s a good time to add to their positions, or if it’s time to reallocate now that they’re back to the January high.

Profit taking was the name of the game last week; hopefully you were able to do some of your own. Leading stocks got hammered across the board; some were sitting on comfortable gains, others recently broke out and weren’t so lucky. Use the market outlook as a guide; right now it’s telling us to be cautious. Price is the ultimate decision maker, and don’t forget to set stops and limit your losses if price action is weak.


If you find this research helpful, please tell a friend. If you don’t find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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 30th = Uptrend

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

COMMENTARY
The 3rd quarter comes to a close and we still have an uptrend signal.  Hopefully the good times continue through Q4!

With the exception of the Russell 2000, all the major market averages continue to trade above their 20 and 50 day moving averages.  The R2K trended lower the entire month of September, which is a bit worrisome considering it’s the “small cap” index and small caps tend to lead bull markets.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-09-30 – US Stock Market Averages

Some distribution last week, so the level of institutional selling is still elevated.  No change in the signal this week, but trading volume and distribution days are another thing to keep your eye on going forward.

OEW remains in an uptrend to start the week.  Longer term, OEW sees the current bull market at a turning point, and commentary has started to focus on the next correction.  Adding on to last week’s comment about caution, Tony says:

While our target all along has been SPX 3000+ by 2018+, and it still may get there, we’re not one to try and pick the exact top. We scale in when we think a bull market is underway, and scale out when we think it is close to ending.

Moving onto our technical analysis, as expected, the S&P ($SPX) retreating after reaching the upper channel.  We start this week closer to the mid-way point, but prices still haven’t tested the January high, so look for that level for support if we continue lower this week.

2018-09-30 - SPX Technical Analysis - Daily

2018-09-30 – SPX Technical Analysis – Daily

The ADX fell last week, putting it back to recent lows.  The DI+/- are roughly equal as well.  No clear direction from that indicator for this week.  The longer-term view remains the same and supports the case for an uptrend; trading volume returning and the January high supporting.

2018-09-30 - SPX Technical Analysis - Weekly

2018-09-30 – SPX Technical Analysis – Weekly

With Q3 earnings still a few weeks out, I don’t see many upside catalysts.  In fact, the trade war / tariff chatter may be just the thing to take us down a notch or two (the January high just below 2900 for the S&P or the 50-day) as discussed last week.  It’s not time to sell the farm, so to speak, but consider trimming winners and taking profits from any trades you initiated back when this uptrend started in March/April.


If you find this research helpful, please tell a friend. If you don’t find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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


 

Posted in Historical Data, Market Trends, Other Blogs | Tagged , , , , | Leave a comment