Stock Market Outlook entering the Week of August 6th = Uptrend
- 20/50 Day Moving Averages: Uptrend
- Price & Volume Action: Uptrend
- Objective Elliott Wave Analysis: Uptrend
A strange week: The DJIA sits at all time highs, the S&P500 moved sideways, the Nasdaq fell to a support level, and the Russell 2000 entered a downtrend(!). Over the past two weeks, the Dow has been on a tear, with 9 higher closes and 8 at all time highs.
Except for the Russell 2000, all the major indexes remain above their 20 and 50 day moving averages.
No change in the price/volume indicator…still in an uptrend.
OEW remains in an uptrend, with an eye on the 2478 level on the S&P500.
Recent earnings announcements have been make or break for growth stocks, causing prices to gap up or down during after hours/pre-open trading. Even positive results are not enough to guarantee a positive price move, as companies have beat earnings estimates, but not by a wide enough margin, and then sold off. This makes investing a bit more risky. You have to hold a position going into the market close, which is not a big deal for longer term holdings, but makes new positions and/or set-ups difficult to manage. This is why proper position sizing is so important…sell as soon as the position moves against you and keep your losses small!
Best of luck!
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You can check out how well (or poorly) the outlook has tracked the market using past performance estimates: