Stock Market Outlook entering the Week of February 25th = Uptrend
- 20/50 Day Moving Averages: Uptrend
- Price & Volume Action: Uptrend
- Objective Elliott Wave Analysis: Uptrend
We start the week in uptrend territory, but to took Friday’s close to get us there. The shortened trading week was accompanied by lower trading volumes; a reprieve from the heavy volumes we saw two weeks ago. Unfortunately, Friday’s rally occurred with really low trading volume.
Thanks to Friday’s surge, all the indexes start the week at or above their 50-day moving averages.
Price and volume action stays in an uptrend. High quality growth stock continue to work their way back to proper buy points. Income stocks remain expensive based on historical price-earnings ratios.
Most of the markets leading growth stocks (e.g. chip makers, ‘FANG’ stocks) have rallied for over a year and are now in late-stage (i.e. their 3rd or 4th) bases. I wouldn’t be surprised to see some sector rotation as institutions look for new growth opportunity…maybe biomeds, as they sold off heavily during the same timeframe, regardless of financial performance.
In other news, Berkshire Hathaway released an annual report for 2017. It’s required reading, regardless of whether you consider yourself a “value” investor.
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You can check out how well (or poorly) the outlook has tracked the market using past performance estimates:
- 2015 Performance – Stock Market Outlook
- 2016 Performance – Stock Market Outlook
- 2017 Performance – Stock Market Outlook