Weekend Stock Market Outlook

Stock Market Outlook entering the Week of May 12th = Downtrend

  • ADX Directional Indicators: Downtrend
  • Price & Volume Action: Uptrend
  • Objective Elliott Wave Analysis: Downtrend

The overall signal switched to a downtrend during last week.  The ADX turned negative on Tuesday.  OEW switched the medium-term signal to a downtrend that may have bottomed on Friday. The Price & Volume signal remains in an uptrend; a couple more distributions days, but prices found support at the 50-day moving average.

Technical analysis of weekly S&P 500 prices

2019-05-12 – SPX Trendline Analysis – Weekly

The weekly price chart shows a market looking for a trend.  Unlike the last two sell-offs from all time highs, we didn’t see the same spike in trading volume and prices closed off the lows for the week.

Technical analysis of daily SPX prices

2019-05-12 – SPX Trendline Analysis – Daily

In the daily view, the S&P 500 ($SPX) put the price channel we were tracking in its rearview mirror.  But the index looks to have found a solid support level, with prices closing above the 50-day moving average on Thursday and Friday.

I can now say I wasn’t surprised to see market prices encounter a sell off.  Within hours of last week’s post, Trump tweeted on the China trade negations and it was downhill from there.  But lets be honest; from the all time high to Friday’s low is only 4.5% or so…and prices recovered almost half of that before closing for the week.  All in all, I’d say investors took that one rather well.

Now we’ll see how long this weak patch lasts.  At the moment, this still looks and feels like a run of the mill correction.  Price action to close last week was positive, technically speaking, so this downtrend may be over already!  Then again, we’re just a tweet or tariff away from something bigger. As always, let price be your guide.

Monday Morning Update: A shock to almost no one, U.S. President Donald Trump warned China not to retaliate against a hike in tariffs. Then China announced plans to impose tariffs on $60 billion worth of U.S. goods, in response to the U.S. tariff hike. S&P futures are down ~2% as of 9am.

If you find this research helpful, please forward to 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.

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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