Stock Market Outlook entering the Week of November 8th = Uptrend
- ADX Directional Indicators: Uptrend
- Price & Volume Action: Uptrend
- Elliott Wave Analysis: Mixed
The stock market outlook flipped back to an uptrend last week…may you live in interesting times indeed! And the S&P500 ($SPX) is knocking on the door of all time highs again.
Prices rose during the week, breaking through the 50-day moving average on higher than average trading volume. Both the ADX and price/volume signals flipped to a bullish signal Wednesday.
That said, they’ve paused at the resistance trendline…something to watch this week, as price has bounced between resistance and support since September. The whipsaw price action may not be over just yet.
In the bear camp, the count is back on life support. Any more upside, and it’s over…again. In the bullish camp, the EW count looks a lot better…we could be in triangle pattern for the 4th wave, or already be in the 5th wave (Minor 3). If price push higher, that would invalidate the triangle pattern.
On the upside, markets typically perform well when there is gridlock in the U.S. government (meaning opposing parties control Congress and the Presidency), and at the moment, that’s what appears to be the result of the election. Why? Because a split usually reduces the likelihood of higher taxes and regulations.
On the downside, recounts are almost a given in states with close races, and the current administration is launching multiple lawsuits to investigate vote counting processes. This type of uncertainty works against equities. And we still have a pandemic to deal with, which is bad for business.
Best to Your Week!