Market Outlook for the Week of July 21st = Minor Correction in Progress, with one more run at new highs before a major correction.
Short-term (20 DMA):
Almost all the stock indexes tested their 20-day moving averages last week, except for the Russell 2000, which ended below its 50-day moving average. Per IBD, the general market uptrend is still under selling pressure.
Intermediate (50 DMA):
Although the averages are above their 50-day moving averages (e.g. the S&P500 is 2% higher), Elliot Wave indicates that the recent uptrend is over…if a downtrend is confirmed, expect the averages to test their 50 days.
Long-term (200 DMA):
Market averages remain above their 200 day moving averages (e.g. the S&P500 is 7% higher), and the current bull market continues per Elliot Wave.
Elliott Wave Analysis from Elliott Wave Update by Tony Caldaro
Last week we had four gap openings, three to the downside, and the market traded to SPX 1953 on Thursday before ending the week at 1968. This week we had four gap openings again, three to the upside, and the market traded to SPX 1956 on Thursday before ending the week at 1978. Meanwhile during all this volatility the SPX has yet to hit the bull market high at 1986 achieved the week before all this began. For the week the SPX/DOW were +0.70%, the NDX/NAZ were +0.65%, and the DJ World index was +0.45%. On the economic front positive reports outpaced negative reports nine to six. On the uptick: the NY/Philly FED, retail sales, business inventories, the PPI, industrial production, the NAHB, leading indicators and weekly jobless claims improved. On the downtick: export/import prices, housing starts, building permits, consumer sentiment and the WLEI. Next week we get reports on home…
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