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.


 

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Weekend Stock Market Outlook

Stock Market Outlook entering the Week of September 23rd = Uptrend

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

COMMENTARY
Another week, another uptrend signal…although this time there are some storm clouds on the horizon that indicate it’s time to be cautious.

Most of the indexes start the week above their 20 and 50 day moving averages, but there’s a divergence between those averages.  The Dow and the NYSE look extended at the moment; they sit well above their 20 day moving averages.  On the other hand, the Nasdaq and Russell 2k are struggling to move past that same moving average.  Since the Russell 2K and the Nasdaq are home to a majority of growth stocks, the fact that they’re lagging industrials and a more “worldwide” index isn’t a sign of strength.

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

2018-09-23 – US Stock Market Averages

The trading environment still looks good from a price/volume perspective (no new distribution days; Friday’s option expiration doesn’t count).  Many leading stocks are testing support levels or have been unable to make much progress after breaking out…another reason to be careful.

OEW remains in an uptrend to start the week.  The market averages tracked by OEW ticked a major checkbox last week; all reached new price highs.  So they reassessed the situation.  No immediate issues to address, but there are some technical indicators that are flashing yellow. (e.g. relative strength, sector strength, # of stocks above their 200 day moving average, etc.).  Therefore, OEW feels it’s time to get cautious.

By last Friday, the S&P ($SPX) rallied to the upper trendline of the price channel we’re tracking, but was again rebuffed.  Each time we’ve reached the upper bound (or nearly reached) since April, we encountered at least a week of selling.  The S&P sits 2-3% above the 50 day / lower price channel trendline, so I won’t be concerned until we break below that level.

2018-09-23 - SPX Technical Analysis - Daily

2018-09-23 – SPX Technical Analysis – Daily

The ADX turned up as a result of last week’s strength, with bullish price movement in control.  But again, the ADX sits well below 20, meaning it isn’t providing the most reliable signals; better to stick with momentum indicators for now.  The longer-term view remains the same and supports the case for an uptrend; trading volume returning and the January high supporting.

2018-09-23 - SPX Technical Analysis - Weekly

2018-09-23 – SPX Technical Analysis – Weekly

Based on the above, I expect a sell-off takes us to back to the January high (just below 2900 for the S&P) and wouldn’t be surprised if we tested support at the 50-day/lower price channel.  That said, you know the saying about opinions, so the best way for you to prepare, participate, and protect is to form your own opinion based on your own investing process and then take action.


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 16th = Uptrend

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

COMMENTARY
Looks like the stock market opted for a run at new highs (rather than searching for support).  A quick run through a bunch of recession indicators (trends in the yield curve, unemployment, new home sales, retail sales, etc.) shows no sign of a recession with the next 12 months.  So even if the markets do test support key support levels sometime soon, it’s most likely a buy the dip opportunity.

All the indexes start the week above their 20 and 50 day moving averages; the Nasdaq and NYSE regained the 20 day average last week.

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

2018-09-16 – US Stock Market Averages

A solid week of gains on rising trading volume last week; not quite as much volume as expected, but we’re in a positive position nonetheless.

OEW is still in an uptrend, and still expecting new highs in all market averages before any kind of next major correction.

2018-09-16 - SPX Technical Analysis - Daily

2018-09-16 – SPX Technical Analysis – Daily

The S&P ($SPX) starts the week in a good position; fresh off a key support level and in the middle of our price channel. Tell me if you’ve heard this one before: the ADX is showing a weak trend. At least the directional indicators are supporting of an uptrend (DI+ is greater than DI-). One of these days I’ll need to find a momentum indicator to supplement the ADX.

2018-09-16- SPX Technical Analysis - Weekly

2018-09-16- SPX Technical Analysis – Weekly

Extending our view, we see the expected increase in trading volume, and the January high acting as a support level last week.

And since we’ve successfully recovered the January high, it’s a good time to check your asset allocation levels and/or take some profits.  Remember; bulls make money, bears make money, pigs get slaughtered.


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 9th = Uptrend

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

COMMENTARY
Good guess last week; the markets sold off after hitting a new high.  I’m expecting an increase in trading volume this week (more like a return to somewhat normal trading volumes).  Anything is possible at this point; maybe we take a run at new highs, maybe we look for support at the 50 day.

All the indexes are above their 50 day moving averages.  The S&P500 and Russell 2000 are sitting on their 20 day moving averages, while the Nasdaq and NYSE are below that level.

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

2018-09-09 – US Stock Market Averages

Most of the indexes added 2 distribution days to their counts, putting the S&P’s total at 5.  That’s a bit elevated, but given the lack of overall volume, not too concerning.  If trading volume picks up this week, accumulation/distribution days will be more impactful.

OEW still has an uptrend signal in place.

2018-09-09 - SPX Technical Analysis - Daily

2018-09-09 – SPX Technical Analysis – Daily

As mentioned at the start, the S&P ($SPX) sold off last week.  On the bright side, prices are still above key technical support levels and our price channel remains intact.  The ADX turned over…no surprise given 4 consecutive days of lower closing prices. But the directional indicators are essentially even.  That’s a long way of saying there’s no change in outlook based on last week’s action.

2018-09-09- SPX Technical Analysis - Weekly

2018-09-09- SPX Technical Analysis – Weekly

Extending the view, the January high could act as support this week.  Hopefully it holds, and we rally back to new highs over the next few weeks.

Participant, protect, and 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 September 2nd = Uptrend

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

COMMENTARY
Short and sweet this week; no change in the signals to start September, and a 4 day trading week as the U.S. markets are closed Monday for the long Labor Day weekend.

All the indexes remain above their 20/50 day moving averages.

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

2018-09-02 – US Stock Market Averages

Price and volume also continue to signal an uptrend, as does OEW.

The S&P ($SPX) gapped up Monday morning, giving us the higher move we were hoping for last week.  The index peaked on Wednesday, which happened to coincide with the upper trendline of the channel we’re following, so naturally prices retreated.  And even though the reading is still below 20, the ADX saw a pretty big bullish shift.

2018-09-02 - SPX Technical Analysis - Daily

2018-09-02 – SPX Technical Analysis – Daily

If I had to guess, I’d say we’re in for a slight decline this week, and then a run higher in two weeks that coincides with higher trading volume.

2018-09-02- SPX Technical Analysis - Weekly

2018-09-02- SPX Technical Analysis – Weekly

Definitely a positive investing environment to kick-off September, but before you go all super-bull remember that anything is possible once trading volume returns.  Participant, protect, and 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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