Stock Market Outlook entering the Week of July 9th = Uptrend
- 20/50 Day Moving Averages: Mixed
- Price & Volume Action: Mixed
- Objective Elliott Wave Analysis: Downtrend
The holiday shortened week wasn’t without its own fireworks, as volatility returned to the US markets in a major way. Proceed with caution; the only thing keeping the market outlook in “uptrend” territory is price verses the 50 day moving average. Had the trading week ended on Thursday, the outlook for this week would have changed to a downtrend!
The Nasdaq continues to lead markets lower from a moving average standpoint. Of more concern is fact that the S&P 500 and Russell 2000 also fell to their respective 50 day moving averages last Thursday. Friday’s recovery postponed a change to a downtrend, putting the signal at mixed.
The price/volume viewpoint is the same as last week, with price action supporting an uptrend, while volume action supporting a downtrend. Friday’s rally came with reduced trading volume, which is the opposite of what you want to see when prices bounce off the 50-day.
OEW finally gave us a downtrend confirmation for all but the Dow, with the expectation that the Dow (being the leading index) will likely provide confirmation when the downtrend is almost complete.
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You can check out how well (or poorly) the outlook has tracked the market using past performance estimates: