Stock Market Outlook entering the Week of June 9th = Uptrend
- ADX Directional Indicators: Uptrend
- Price & Volume Action: Mixed
- Objective Elliott Wave Analysis: Uptrend
Two of three signals shifted to uptrends sometime last week, as U.S. stocks rallied despite political and economic uncertainty. The ADX directional indicators flipped late last week, as did OEW. Prices are just below the 50-day moving average, but leading stocks are behaving well.
2019-06-09 – SPX Trendline Analysis – Daily
In the daily view, S&P 500 prices ($SPX) got within a few points of the 2720 support level before rallying back above the 200 day moving average. And the bearish trendline ended Tuesday. That said, be on the lookout early in the week for some profit taking. Since prices closed at the 50 day, that level could still provide some resistance early in the week.
2019-06-09 – SPX Trendline Analysis – Weekly
In the weekly view, the trend of higher trading volume in June looks to be repeating.
Unfortunately, stock markets are still driven by the news cycle, so it’s difficult to judge the strength of this latest rally attempt. The May jobs report came in well below estimates; normally a sign that the economy is slowing. Combined with an inverted yield curve, you’d think large investors would be concerned. Instead, hopes are high that the Fed will be more likely to cut interest rates, which in turn is seen as a catalyst for higher stock prices.
The underlying risks and issues that drove prices lower in May are far from solved (e.g. China tariffs, corporate debt levels, etc.), so a little extra caution is warranted. Now is not the time to loosen your stops, use margin, or increase risk limits on your position sizes.
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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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