Stock Market Outlook entering the Week of January 24th = Downtrend
- Short-term (20 DMA): Downtrend
All the 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): Downtrend
All the major stock market averages remained below their 200-day moving averages.
US equities found some support on Wednesday, providing a needed pause to the almost daily selling that we’ve experienced in January. Prices appear to have reached a near-term bottom.
Price/volume action improved a tiny bit, but we’ll need to see a lot of high volume buying to change the market outlook.
As mentioned on the OEW blog, expect a short-term rally and use it to “bearify” your portfolio. This means short positions, buying put options, selling covered calls, or just selling your positions and sitting on the sidelines until conditions improve.
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