Weekend Stock Market Outlook – July 11 2021

Stock Market Outlook entering the Week of July 11th = Uptrend

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

ANALYSIS
The stock market outlook continues in an uptrend this week, even with a slight spike in volatility.

The S&P500 ($SPX) sits at all time highs, with both the ADX and price/volume signals signaling a bullish environment.

Technical analysis of daily SPX prices

SPX Price Chart for the Week of July 11 2021

On the downside, the ADX is still below 20 (weak trend), and we did pick up another pair of distribution days (bringing the total to 4).

Technical analysis of daily SPX prices

SPX Price Chart for the Week of July 11 2021

Elliott Wave also remains in an uptrend, and looks like a corrective 4th wave took place last week (abc); a pretty consistent 4th wave pattern in this rally. If the 4th wave continues, we’ll head lower early next week, with the wave (i) high from mid-June the max decline. If complete, that puts the S&P into the last wave of the Primary 1.

The S&P has had waves extend before, and this count could be wrong, so there’s no guarantee the current uptrend ends anytime soon, 5th wave or not. But the Primary 2 wave will a bear market, whenever it starts, and could retrace the entire pandemic advance! Highly unlikely given all the “support” markets have these days, but still a possibility.

Since the market is up almost 20% for the year, there’s nothing wrong with taking profits and right-sizing your position and portfolio sizes.

COMMENTARY
All eyes were on the 10-year treasury last week, with the yield dropping back to February levels. That’s the opposite direction of the core inflation numbers, indicating that the bond market isn’t overly concerned about the recent spike in inflation…yet.

Best to Your Week!

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