Weekend Stock Market Outlook

Stock Market Outlook entering the Week of May 24th = Uptrend

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

The stock market outlook flipped to an uptrend last week (Monday) with another change in the ADX signal. Price/volume remained in an uptrend, while the Elliott Wave downtrend remains in place…it’s just a REALLY shallow one.

Technical analysis of daily SPX prices

2020-05-24-SPX Trendline Analysis-Daily

The S&P500 ($SPX) sits ~8% above the 50-day moving average, and just below the 200-day moving average (~3,000). The directional indicators flipped again, but the overall ADX still shows a VERY weak trend, as it has been for the entire month.

The downward trendline fell to last Monday’s strong advance, so there’s a new uptrend traced off the recent lows.  But prices didn’t make much progress the rest of the week.

Technical analysis of daily SPX prices

2020-05-24-SPX Elliott Wave Analysis-Daily

For Elliott Wave, the S&P500 has been working through an intermediate B wave for all of May.  A B-wave is expected to retrace a lot of the A-wave.  So far, that hasn’t really happened.  I’ve seen three potential counts:

  1. B-wave completed on May 14th
  2. B-wave is ~halfway complete
  3. B-wave is just getting started

Scenario 1 would mean a new uptrend (C-wave), with the first level of resistance near the 3140 price level (79% retracement).  Scenarios 2 and 3 mean the S&P could start the next leg of the downtrend at any time…maybe hit ~3,000 first (coincidentally the 200 day moving average).  Odds favor the B-wave is still in place, so this signal is still in a downtrend for now.

Stocks jumped on reopening activities and positive news related to COVID19 vaccine trials.  Not to be outdone, the U.S. Senate grabbed headlines by introducing a bill that could require Chinese companies to delist from U.S. stock exchanges.

The Strategic Investment Conference wrapped up last week, and the final sessions did not disappoint.  I’ve got a lot of listening/watching to do; so much information!  If even half of the opinions turn out to be true, we’re in for a very interesting period in history!

Short week coming up, with U.S. exchanges closed for Memorial Day.

Best to your week!

This entry was posted in Historical Data, Market Trends and tagged , , , , . Bookmark the permalink.