The Safe Investing Blog

Market Outlook entering the Week of Nov 2nd = Uptrend

TECHNICALS

• Short-term (20 DMA): Uptrend
  All the major stock market averages ended the week above their 20-day moving averages.

• Intermediate (50 DMA): Uptrend
  Except for the Nasdaq, all the major stock market averages ended the week above their 50-day moving averages.

• Long-term (200 DMA): Uptrend
  All the major stock market averages ended the week above their 200-day moving averages.

COMMENTARY
Trying to understand this market reminds me of the conversation between the Caterpillar and Alice from “Alice in Wonderland”:

‘Who are you?’ said the Caterpillar. This was not an encouraging opening for a conversation. Alice replied, rather shyly, ‘I — I hardly know, sir, just at present — at least I know who I was when I got up this morning, but I think I must have been changed several times since then.’

After encountering the highest amount of selling since 2012, the market commentary from October 12th mentioned a potential rebound.

Well, we got that rebound and then some!

Within 1 week, the S&P500 rose so much that it appeared to complete the first short-term uptrend/recovery in the mid-term downtrend that started in September (per Elliott Wave analysis). The key price level for the S&P500 was 1,973.  If the market passed that level, we would need to reassess the market outlook.

I admit it:  I was skeptical.  A correction is long overdue, and represents an eagerly awaited buying opportunity for a few of my investing strategies.  And with the Fed’s ending of QE, now is the perfect time…at least that’s what I thought.

No such luck.  Last week, the S&P500 blew past that resistance level, along with a few others, ending the week at 2,014.  No QE?  No problem.

For the week, William O’Neal’s Big Picture analysis remained in a confirmed uptrend, and the NASDAQ picked up a distribution day.

I am surprised, but the chart’s don’t lie, and that’s why we use them to determine market direction. Remember the words of John Maynard Keynes:

The markets can stay irrational longer than you can stay solvent.

Keep your loses small, regardless of which way you think the market is headed.  And keep your eye out for that correction! Key S&P500 price levels to watch:

• Support: 2,000 and the old resistance level of 1,973
• Resistance: 2019, 2070

Elliott Wave Analysis from the ELLIOTT WAVE lives on by Tony Caldaro

2014-11-02 – US Stock Market Averages

Market Outlook entering the Week of October 26th = Confirmed Downtrend

Short-term (20 DMA): Uptrend
All the major stock market averages ended the week above their 20-day moving averages.

Intermediate (50 DMA): Downtrend
Except for the Nasdaq, all the major stock market averages ended the week below their 50-day moving averages.

Long-term (200 DMA): Uptrend
All the major stock market averages ended the week above their 200-day moving averages.

Market Commentary
William O’Neil’s Big Picture analysis switched back to a confirmed uptrend on Tuesday.  The change isn’t too surprising, given the volatility of market price action over the past month or two.  As mentioned last week:

With so much selling in such a short period of time, a price rebound is likely during the coming week(s)…a good opportunity to adjust your holdings if you haven’t already.

Tony Caldaro’s Objective Elliott Wave analysis continue to show a market in correction, with the first of three short-term uptrends close to completion (as indicated by market prices rising above their 20-day moving averages).

Last week’s key price levels for the S&P500 are still in play:

• Support @ 1,920 (falling below continues current trend)
• Resistance @ 1,973 (rising above could signal a change in market outlook)

Elliott Wave Analysis from Elliott Wave Update by Tony Caldaro

2014-10-26 – US Stock Market Averages

Market Outlook entering the Week of October 19th = Confirmed Downtrend

Short-term (20 DMA): Downtrend
All the major stock market averages ended the week below their 20-day moving averages.

Intermediate (50 DMA): Downtrend
All the major stock market averages ended the week below their 50-day moving averages.

Long-term (200 DMA): Downtrend
All the major stock market averages ended the week below their 200-day moving averages.

Market Commentary
William O’Neil’s Big Picture and the Tony Caldaro’s Objective Elliott Wave analysis continue to show a market in correction.

With so much selling in such a short period of time, a price rebound is likely during the coming week(s)…a good opportunity to adjust your holdings if you haven’t already.

Key price levels from Tony’s analysis range from 1,920 – 1,973 on the S&P500.

Elliott Wave Analysis from Elliott Wave Update by Tony Caldaro

2014-10-19 – US Stock Market Averages

Market Outlook entering the Week of October 12th = Confirmed Downtrend

Short-term (20 DMA): Downtrend
All the major stock market averages ended the week below their 20-day moving averages.

Intermediate (50 DMA): Downtrend
All the major stock market averages ended the week below their 50-day moving averages.

Long-term (200 DMA): Downtrend
All the major stock market averages ended the week at or below their 200-day moving averges.

Market Commentary
What a week!  The markets were all over the place, but all that volatility couldn’t stop the downward slide. Hopefully, you’ve taken the appropriate actions to capture profits and preserve capital.

William O’Neil’s Big Picture and the Tony Caldaro’s Objective Elliott Wave analysis continued to show a market in correction.

The market’s last hope to return to an uptrend is a slim one. In the September 13 weekend update, 1,905 was a key support level for the S&P500.  Friday’s close put us at 1906 and some change.

Market action will ultimately determine when the markets turn around, but here are some other support levels to watch in the S&P500:

• 1738 (~9% drop from Friday’s close)
• 1627 (~15% drop from Friday’s close)
• 1560 (~18% drop from Friday’s close)

Now it is the time to dust off those watch lists and start looking for your next buys.

Elliott Wave Analysis from Elliott Wave Update by Tony Caldaro

2014-10-12 – US Stock Market Averages