Weekend Stock Market Outlook

Stock Market Outlook entering the Week of August 16th = Uptrend

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

Little change in price last week means the stock market outlook shows an uptrend in place this week.

Technical analysis of daily SPX prices

2020-08-16-SPX Trendline Analysis-Daily

The S&P500 ($SPX) is oh so close to a new all time high, and is up ~3.5% for the year, believe it or not.  It’s also looking a bit extended from the 200-day moving average.  Not quite to the levels seen in Q1 of this year, but something to watch.  No change in the ADX or price/volume signals, though we did pick up a distribution day. The support trendline also remains in place.

Technical analysis of daily SPX prices

2020-08-16-SPX Elliott Wave Analysis-Daily-Intermediate A

Elliott Wave is still a problem for this uptrend, and there was another negative divergence in the RSI last week as prices came within a few points of the all time high.

An Intermediate B wave typically retraces 50-79% of the Intermediate A wave. If the count and pattern holds, the target for the next downtrend somewhere between 2800 and 2400.

On the upside, U.S. retail sales were strong in July, and actually bested levels prior to the pandemic. But that improvement came with increased inflation, and negotiations for another aid package have stalled.

Given that we’re in a historically “weak” period for market prices, it wouldn’t be surprising to see a pull back over the next 2-3 weeks.

Best to your week!

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