Weekend Market Outlook

Market Outlook entering the Week of August 16th = Downtrend

MOVING AVERAGES

  • Short-term (20 DMA): Downtrend
    All major stock market averages remained below their 20-day moving averages.
  • Intermediate (50 DMA): Downtrend
    All the major stock market averages remained below their 50-day moving averages.
  • Long-term (200 DMA): Mixed 
    2 of the 5 major stock market averages remained above their 200-day moving averages.  The Russell 2000, NYSE and DJIA remained below.

COMMENTARY
A lot of price action last week, but we’re basically back to where we started last week, so the downward market outlook remains unchanged from last week.

That said, we’re still range-bound and not a lot has happened with regard to technical support and resistance levels:

  • Resistance:  2,085 / 2,131
  • Support:  2,019 / 2,070

Tony C. used the S&P500 and calculated 3 potential price-levels for resolving the current market weakness:  2040, 2019, and 1820.

Dropping to the 1820 price level would qualify as the long-awaited correction, while bouncing off the 2019 and 2040 levels would just kick the correction down the road.  In other words, we’ll still run into a meaningful correction at some point, you’ll just have some more time to prepare.

With Friday’s close of 2091 and change, here’s the potential, short-term damage from each scenario:

  • 2040 = 2.4% decline (~4% decline from 2131 high)
  • 2019 = 3.4% decline (~5% decline from 2131 high)
  • 1820 = 13% decline (~15% correction from 2131 high)
2015-08-16 - US Stock Market Averages

2015-08-16 – 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
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