Market Outlook entering the Week of July 26th = Long-term uptrend under pressure

MOVING AVERAGES

• Short-term (20 DMA): Sell Signal
  4 of the 5 major stock market averages fell below their 20-day moving averages.

• Intermediate (50 DMA): Sell Signal
  4 of the 5 major stock market averages fell below their 50-day moving averages.

• Long-term (200 DMA): Mixed 
  3 of the 5 major stock market averages closed above their 200-day moving averages.

COMMENTARY
Just when it looks safe to get back into stocks, US equities get slammed with 4 straight days of selling.  That’s not the type of action needed to support an uptrend.

The high-volume indicates that market makers were sellers last week, adding a negative view to the outlook.

Not surprisingly, intermediate support/resistance levels from Objective Elliott Wave analysis remain unchanged from last week, which has been the case for most of 2015:

• Resistance:  2,131/ 2,198
• Support:  2,070 / 2,085

The S&P500 was unable to get above the 2131 resistance level, which I mentioned last week as the only real hurdle the S&P500 had to clear prior to a 2198 price level.

Tony C. raised the specter of the long-awaiting correction in his weekend market commentary. As much as I am looking forward to that event (because I’m sitting on so much cash), I’ll believe it when I see it.

That said, last week marked the first time in a while that I’ve had to switch from pruning stocks with weak technical/fundamental performance to selling in order to limit losses.  As always, let your stocks do the talking, and follow their lead.

2015-07-26 – US Stock Market Averages

Sources:

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  For price/volume data, head to 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 fell below their moving averages during the trading week
• Sell signal=Market indexes rose above their moving averages during the trading week