Stock Market Outlook entering the Week of May 19th = Downtrend
- ADX Directional Indicators: Downtrend
- Price & Volume Action: Downtrend
- Objective Elliott Wave Analysis: Downtrend
All the major indexes (S&P, NASDAQ, DJIA, NYSE, R2K) recovered some ground last week, but still closed below their 50-day moving averages. So it’s no surprise that the stock market outlook stays at “downtrend” for a second week. The ADX remains in bearish territory, as does OEW. Price & Volume also turned negative last Monday, when prices opened well below the 50-day moving average on trade war fears.
The weekly price chart continues to show a market in search of a trend. Verses the past two major sell-offs (2018 Q1 and Q4), prices recovered quickly this time around, and trading volumes weren’t nearly as high. Combined, this info indicates less “acute” selling pressure.
2019-05-19 – SPX Trendline Analysis – Weekly
In the daily view, the S&P 500 ($SPX) may have put in a near term bottom, just above 2800, which was a major resistance level in Q4 last year. I added new trendlines to reflect the current downtrend and the potential uptrend.
2019-05-19 – SPX Trendline Analysis – Daily
The ADX narrowly missed a cross-over, so we’ll have to wait a bit more before that signal turns bullish. Price & volume needs a follow-through day this week to confirm a new rally…and a close above the 50-day would also be bullish. The distribution day count isn’t low, but could be a lot worse.
OEW maintains the outlook that new highs are just around the corner.
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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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