Weekend Stock Market Outlook

Stock Market Outlook entering the Week of December 6th = Medium-term uptrend


  • Short-term (20 DMA): Uptrend 
    All the major stock market averages closed above their 20-day moving averages.
  • Intermediate (50 DMA): Uptrend
    4 of the 5 the major stock market averages remained above  their 50-day moving averages, and the NYSE closed above that mark by Friday.
  • Long-term (200 DMA): Mixed 
    3 of the 5 major stock market averages remained above their 200-day moving averages.

Last week had a lot of volatility, which has interesting implications on the length of the current uptrend.

Thursday saw a very bearish move, with the S&P500 taking out the 200-day moving average on high trading volume.  Friday answered with a bullish move, allowing the S&P500 to retake the 200-day moving average, albeit on slightly lower trading volume.

Per OEW, there are two likely scenarios:

  • If Thursdays action continues, we’re likely to see another correction, which would delay the end of the current bull market until we have another chance to test all-time highs (probably sometime in 2016).
  • If Friday’s action continues, we’re likely to see new highs in the next few weeks, which could spell the end of current bull market shortly thereafter.

Given the recent number of distribution days, the coming interest rate hike, and the normal, end-of-year tax loss harvesting, I think we’ll see a correction, and then the bull market extend into 2016.

But it doesn’t matter what I think.  Be prepared for either situation; update your watch list for good buying opportunities, and keep you losses small for current holdings.

2015-12-06 - US Stock Market Averages

2015-12-06 – US Stock Market Averages

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 rose above their moving averages during the trading week
  • Sell signal=Market indexes fell below their moving averages during the trading week
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