Stock Market Outlook entering the Week of March 24th = Uptrend
- ADX Directional Indicators: Uptrend
- Price & Volume Action: Mixed
- Objective Elliott Wave Analysis: Uptrend
We touched on the possibility for weak price action last week, and that’s exactly what we got. An inverted yield curve (ever so slightly, but it did invert) raised the specter of recession again. Dovish Fed statements and the prospect of QE-lite later this year, once reassuring, now seems to be confirmation they are also expecting weakness this year.
In the weekly view, the S&P retreated from the key resistance level pointed out last week and closed “on” the uptrend. The 10 / 40 week averages are about to cross-over as well, which is usually a bullish sign.
2019-03-22 – SPX Trendline Analysis – Weekly
Switching to a daily view, the S&P500 ($SPX) starts the week in the worst possible location if you’re trying to confirm the recent trendlines: a few points below the resistance trendline going back to Q4 of last year AND the recently confirmed uptrend. Not enough to say we’ve found or broken key support levels, but just enough for everyone to validate their opinion.
2019-03-22 – SPX Trendline Analysis – Daily
The DI+ / DI- remains in bullish territory. Price/volume weakened from uptrend to mixed, as the high-volume gains we were looking for didn’t materialize. Instead, the S&P picked up 3 more distribution days…a clear sign of institutional selling. Price is still above the 50-day moving average.
The OEW group continues to see an uptrend with sideways/corrective price action in the short-term.
The Russell 2000 plunged on Friday, and starts this week below the 50-day moving average. It’s in the worst technical shape of the major indexes, which is concerning since it typically serve as a leading indicator for “growth” investing (small, innovative companies are the engine that drives that type of strategy).
2019-03-24 – US Stock Market Averages
Many of the “growth investing” stocks that I watch struggled during the week and then got pummeled on Friday. Recent breakout candidates are either re-entering their bases or struggling to stay above their 7-8% stop loss levels. We had a good run since the start of the year, now may be a good time to book gains…especially if they’re >20%.
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Charts provided courtesy of stockcharts.com.
If you’re interested in learning more about the relationship between price and volume, or how to find and trade the best stocks for your growth strategy, check out this book on Amazon via the following affiliate link: How to Make Money in Stocks: A Winning System in Good Times and Bad. It’s one of my favorites.
For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.
Once a year, I review the market outlook signals as if they were a mechanical trading system, while pointing out issues and making adjustments. The goal is to give you to give you an example of how to analyze and continuously improve your own systems.
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