Weekend Stock Market Outlook

Stock Market Outlook entering the Week of October 21st = Downtrend

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

We start this week sitting on a small, fledgling recovery within a downtrend.  The 200 day moving average provided some level of support, but it’s not clear if this is the start of a rally or a pause in the downtrend.

All the indexes kick things off below their 20 and 50 day moving averages, keeping this signal in a downtrend.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-10-21 – US Stock Market Averages

The downtrend remains from a price/volume perspective, as leading stocks continue to get trounced and prices continue to fall on higher than average trading volume.

OEW remains in a downtrend.  They expected a 250 point decline, followed by a 50% retracement, and then another decline to lower lows.  Last week, we recovered just under 50% of the first drop (~110 of the 230 points).

2018-10-21 - SPX Technical Analysis - Daily

2018-10-21 – SPX Technical Analysis – Daily

The S&P ($SPX) found support at the 200 day moving average during the week, but didn’t progress much from that level either.  If that level doesn’t hold, a trip below 2600 is likely (losses of another 6% or so).

2018-10-21 - SPX Technical Analysis - Weekly

2018-10-21 – SPX Technical Analysis – Weekly

Now is not the time to go all in; we need some positive developments first.  But take a look at your watch list and see what’s holding up reasonable well in the midst of the sell-off.  Those are likely the names that will lead the market higher when it turn around.

Participate. Protect. Prepare.

If you find this research helpful, please tell a friend. If you don’t find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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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