Weekend Stock Market Outlook

Stock Market Outlook entering the Week of September 25th = Mixed 

  • 20/50/200 Day Moving Averages: Mixed 
  • Price & Volume Action: Uptrend
  • Objective Elliott Wave Analysis: Uptrend

COMMENTARY
As expected, another volatile week for US stocks.  The Fed’s decision not to raise interest rates led to a rally, most notably in the tech/small cap sectors.  The markets aren’t out of the woods yet, so the outlook remains mixed, but a strong showing this week will prompt a change in market outlook.

The Nasdaq and Russell 2000 are leading the way, with both indexes above their 20, 50, and 200 day moving averages.  The NYSE/S&P500 are above their 20 day moving averages, but not their 50’s, reflecting the recent sell-off.  The DJIA ended last week below both its 20 and 50 day moving averages.  Since 3 of the 5 indexes closed below their 50-day, the outlook remains mixed from a moving average perspective.

2016-09-25 - US Stock Market Averages

2016-09-25 – US Stock Market Averages

No distribution day this Friday (except for the DJIA) as trading volume subsided verses Thursday.  And positive price/volume action on Wednesday and Thursday signaled that the uptrend is back.  That said, the count remains elevated, so a relatively small amount of institutional selling could derail the new uptrend.

OEW increased the odds of an uptrend to 80%.  As mentioned last week, this also means that the recent correction was the smallest in the last 10 years.  My hypothesis is a combination of quantitative easing and high frequency trading are increasing the magnitude and shortening the duration of sell-offs.

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  Charts provided courtesy of stockcharts.com.

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