Stock Market Outlook entering the Week of June 11th = Uptrend
- 20/50 Day Moving Averages: Uptrend
- Price & Volume Action: Uptrend
- Objective Elliott Wave Analysis: Uptrend
U.S. stocks continued their march higher last week, although Friday’s massive sell of in technology names (price and volume) is enough to give us pause as we start this week. Add to that this week’s Fed meeting and an expected rate hike…no one knows for sure how market prices will react.
All the major stock market averages start the week above key support levels (20 and 50 day moving averages). The Nasdaq had quite the sell off on Friday, as investors appear to have rotated out of tech stocks and into industrials, banks, and energy.
Although the overall distribution day count remains low, many leading stocks were crushed on Friday. Since many of the leading stocks are also technology plays (e.g. the so called FAANG stocks of Facebook, Apple, Amazon, Netflix, and Google), the price/volume action adds to the possibility of sector rotation.
Following last week’s call to prune your holdings, tread carefully in the near term if you plan to initiate new positions. We may be in an uptrend, but if the sectors are rotating, a new batch of leaders will emerge and your prior research may need to be revisited.
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You can check out how well (or poorly) the outlook has tracked the market using past performance estimates: