Weekend Stock Market Outlook

Stock Market Outlook entering the Week of February 14th = Uptrend

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

The stock market outlook shows an uptrend, with prices near the upper bound of a former bullish price channel.

Technical analysis of daily SPX prices

2021-02-14-SPX Trendline Analysis-Daily

The S&P500 ($SPX) is within a bullish trading day of 4,000. The ADX shows a weak trend getting weaker.  Price/volume signal remains bullish, and leading high-growth stocks are acting well.  But declining trading volume as price reaches new highs remains a big concern, and suggests a lack of conviction from institutions.

Technical analysis of daily SPX prices

2021-02-14-SPX Elliott Wave Analysis-Daily-Primary1

For Elliott Wave, the 5th wave uptrend rolls on.  If symmetry with the 1st wave is maintained, the current wave should last a few more days before completing.

Still risk on…for now. By all typical valuation measures, stocks are extremely overvalued.

Shows extremely overvalued stock market

Source: Ned Davis Research (Hat Tip to CMG)

Not too surprising…where else are you going to park your money these days?  Even high yield (junk) bonds aren’t going to do it; yields sit at record lows!

Showcase junk bond yields over time

Hat Tip to CMG…again

Watch volatility ($VIX).  It’s still elevated when compared to the last few years, but nearing the low point of the since the pandemic sell-off.  I’d expect it to be closer to 12 before we see a major sell-off (>20%), but that doesn’t mean a minor one isn’t in the cards (<20%).

Shows volatility over timeBest to Your Week!

P.S. The 2020 Annual Performance Report should be out later this week.

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

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