Weekend Stock Market Outlook – September 11 2022

Stock Market Outlook entering the Week of September 11th = Downtrend

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

The stock market outlook stayed with a downtrend, despite of some short-covering ahead of this week’s event risks.

The S&P500 ($SPX) rose 3.6% last week, finding support near 3900 (the late May early July support/resistance area) for a second week.  The SPX even managed to reclaim the 50-day moving average on Friday.

Technical analysis of daily SPX prices

SPX Price & Volume Chart for the Week of September 11 2022

Also on Friday, the ADX directional indicators flipped to bullish.  Even with the move above the 50-day moving average, the price/volume signal only shifts to mixed.  Friday’s move came on lower and below-average trading volume, and the distribution day count is elevated at 6.

Technical analysis of daily SPX prices

SPX Elliott Wave Analysis for the Week of September 11 2022

The Elliott Wave shows a completed first wave for the new downtrend, so the counter-trend rally isn’t too surprising.

Tricky week ahead with three market moving events on tap, so I fully expect more chop as traders adjust their portfolios and hedges.

The latest CPI numbers are released on Tuesday, followed by PPI numbers on Wednesday.  It’s hard to know how stocks will react, so I’ll be watching the yield curve to see the expected impact, if any, to Fed policy.  Friday is a quadruple witching day, with quarterly, monthly, weekly options and futures contracts expiring.

Best To Your Week!

P.S. If you find this research helpful, please tell a friend.   If you don’t, tell an enemy.

Sources: Bloomberg, CNBC, Hedgeye, US Bureau of Economic Analysis

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