Weekend Stock Market Outlook

Stock Market Outlook entering the Week of May 1st  = Uptrend

MOVING AVERAGES

  • Short-term (20 DMA): Mixed
    3 of the 5 major stock market averages fell below their 20-day moving averages.
  • Intermediate (50 DMA): Uptrend 
    4 of the 5 major stock market averages remained above their 50-day moving averages.
  • Long-term (200 DMA): Uptrend 
    4 of the 5 major stock market averages remained above their 200-day moving averages.

COMMENTARY
The uptrend remains intact for another week, although not without some substantial short-term selling (using the 20-day moving average as a proxy).

Last week, sector rotation continued and the Nasdaq took a beating, breaching the 20, 50, and 200 day moving averages on its way to wiping out all gains since mid-March.

Many decent earnings reports have led to sell-offs, which indicates anything but home run numbers aren’t well received by the investment community (with some notable exceptions like Facebook and Amazon).

Price/volume action in the major market averages supports this hypothesis, as an increasing number of down days with higher trading volume shows institutions have been selling over the past few weeks.

OEW still shows an uptrend label, albeit “weakening”. ~2% for the S&P500 in either direction will either re-establish the uptrend or confirm a new downtrend (hits new highs or breaches the 50 day moving average).

Continue to watch for weakness in your holdings (high-volume selling, etc.) and prune as necessary.

2016-05-01 - US Stock Market Averages

2016-05-01 – US Stock Market Averages

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Price/volume charts are provided courtesy of 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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