The Safe Investing Blog

Stock Market Outlook entering the Week of December 10th = Uptrend

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

ANALYSIS
The stock market outlook continues to show an uptrend in place.

The S&P500 ($SPX) gained 0.2% last week. The index sits ~5% above the 50-day moving average, and ~7% above the 200-day moving average.

SPX Price & Volume Chart for the Week of Dec 10 2023

The ADX directional indicators and price/volume are bullish (strong uptrend, backed by companies breaking out of good price patterns and limited institutional selling).

For Elliott Wave, the SPX breached a key resistance level (4706) during Friday’s trading session, before closing lower.  4607 was the 100% retracement level for the July to October decline.  Closing above that level would eliminate the Intermediate 2 and Minute C waves from consideration.  Technical indicators show overbought conditions, with a negative divergence in the RSI(5) and a bearish cross-over in the MACD.

SPX Elliott Wave Analysis for the Week of Dec 10 2023

COMMENTARY
Last week’s U.S. employment data was a mixed bag:  JOLTs data showed fewer job openings than expected in October, while NFP showed a better than expected increase of ~200k jobs in November and a drop in unemployment to 3.7%.

There will be a lot of economic activity for markets and investors to digest this week, including:

• Monday: U.S. Treasury auctions (3M, 6M, 3Y, 10Y)
• Tuesday: November CPI & 30Y Bond Auction
• Wednesday: November PPI & FOMC Rate Decision
• Thursday: November Retail Sales
• Friday: Options Expiration (End of Quarter / “Quadruple Witching” Day)

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, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of December 3rd = Uptrend

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

ANALYSIS
No change in the stock market outlook, as we begin December in an uptrend.

The S&P500 ($SPX) gained x% during last week, and sits just below a long-term trendline from the all time high on January 4th, 2022!  The index starts this week ~5.4% above the 50-day moving average, and ~7.2% above the 200-day moving average.

SPX Price & Volume Chart for the Week of Dec 03 2023

The ADX directional indicators and price/volume are bullish, while Elliott Wave analysis continues to wait for the current wave to end.  4607 is the key resistance level.

SPX Elliott Wave Analysis for the Week of Dec 03 2023

COMMENTARY
Revised GDP data shows the overall economy grew at a higher rate than first estimated.  Unfortunately, government spending continues to increase relative to consumer spending, which is not a sign of strong consumers.

PCE data shows inflation continuing to slow; which means pricing are still rising, just not as quickly verses last month or last year.  Slowing inflation is NOT the same as deflation, when prices are falling.

During his Friday speech, Fed Chair Powell said it’s premature to consider rate cuts, and that rate hikes are still a possibility.  The treasury market disagreed; interest rates headed lower, which means participants expect rate cuts sooner rather than later.  In fact, the Fed Futures market is pricing a ~60% probability of a rate for the March 20th FOMC meeting!

This week’s economic data centers on the jobs market, ahead of the next FOMC meeting on the 13th.

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, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of November 26th = Uptrend

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

ANALYSIS
The stock market outlook exits the Thanksgiving holiday in an uptrend.

The S&P500 ($SPX) gained 1% during last week’s holiday shortened trading session. The index starts this week ~5% above the 50-day moving average, and ~6.5% above the 200-day moving average.

SPX Price & Volume Chart for the Week of Nov 26 2023

The ADX directional indicators and price/volume are bullish, while Elliott Wave analysis continues to wait for the current wave to end.  4607 is the key resistance level.

SPX Elliott Wave Analysis for the Week of Nov 26 2023

COMMENTARY
Last week’s bond auction went well, supporting equity markets rather than hindering their move higher.  FOMC meeting minutes were released on Tuesday, and were interpreted as dovish by most pundits.

This week, Q3 GDP data is released on Wednesday, PCE data on Thursday, followed by a speech from Fed Chair Powell on Friday.

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, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of November 19th = Uptrend

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

ANALYSIS
The stock market outlook heads into the third week of the current uptrend.  There’s STILL no shortage of volatility within the stock market, despite the volatility index ($VIX) showing a low volatility environment.

The S&P500 ($SPX) gained 2.2% last week. The index starts this week 4% above the 50-day moving average, and ~6% above the 200-day moving average.

SPX Price & Volume Chart for the Week of Nov 19 2023

The ADX directional indicators remain bullish, as well as price/volume.

No change in Elliott Wave analysis versus last week, continuing to show a corrective-wave rally in progress.  The negative divergence in the RSI(5), noted last week, was a false signal.  Several wave counts are still possible.

SPX Elliott Wave Analysis for the Week of Nov 19 2023

COMMENTARY
October headline CPI came in slightly below expectations, and well below last year, fueling a jump in the indexes on Tuesday.

• Headline (Y/Y) : +3.2% vs. +3.7% last year vs. +3.3% expected
• Core (Y/Y): +4.0% vs. +4.1% last year vs. +4.1% expected

October PPI performed similarly to CPI:

• Headline (Y/Y) : +1.3% vs. +2.2% last year vs. +1.9% expected
• Core (Y/Y): +2.4% vs. +2.7% last year vs. +2.7% expected

Last week’s price movement definitely fell into the “high volatility” category.  But that can mean downside AND upside moves.  For example, Target ($TGT) gapped up ~14% after their earnings report, then added another ~3.5% intraday.  Walmart ($WMT), on the other hand gapped down 6.5% before market open on Thursday, then lost another 1.7% intraday.  Those types of moves suggest both stocks were mispriced, either in the days prior to the earnings report, or afterwards.

And while you can find examples of up and downside volatility within many asset classes, the “magnificent seven” (i.e. $AAPL, $AMZN, $GOOG/$GOOGL, $META, $MSFT, $NVDA, $TSLA) drive equity index performance right now, although $TSLA hasn’t been pulling its weight this month.

A short trading week coming up, with U.S. markets closed on Thursday for the Thanksgiving holiday and an early end to Friday’s session (1pm EST).  There’s a 20-year treasury bond auction Monday afternoon (1pm).  If the previous longer-term bond auctions are any indication, this one will be lousy, send rates higher and equities lower.  Tuesday afternoon, we get a 10-year TIPS auction and release of the latest FOMC meeting minutes.

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, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of November 12th = Uptrend

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

ANALYSIS
The stock market outlook heads into the second week of the current uptrend, and there’s STILL a lot of volatility beneath the market’s surface.  Another week to tread carefully when deploying your capital.

The S&P500 ($SPX) gained 1.3% last week. The index starts this week ~1.5% above the 50-day moving average, and ~3.5% above the 200-day moving average, after breaking above the recent trendline of lower highs.

SPX Price & Volume Chart for the Week of Nov 12 2023

The ADX directional indicators remain bullish.  Price/volume also shows an uptrend in place, but trading volume remains an issue for the new rally. It remained below average for the entire week, and the highest volume day came via institutional selling (i.e. a distribution day).

SPX Elliott Wave Analysis for the Week of Nov 12 2023

Elliott Wave analysis continues to show a counter-trend rally in progress, with no change the overall wave count versus last week.  The current wave (Minor 2 or A) managed to put in a higher high on Friday, but the RSI(5) shows a potential negative divergence, suggesting the end is near.

COMMENTARY
The 30-year bond auction was the main event last week, and it didn’t go well.  Demand was less than expected, indicating that investors see more risk in the future, and want a higher interest rate to compensate.  The result was higher bond yields on Thursday, which caused equities to sell off.

Speaking of Thursday fireworks, investors seem to have a more favorable view of Powell’s hot-mic swearing than of his handling of interest rates.

And on Friday, after the market’s closed, the credit rating agency Moody’s changed their outlook for U.S. sovereign debt from “stable” to “negative”, based on the dysfunction in the U.S. legislative branch.  It’s not an outright downgrade, like the one from Fitch in August, but not a sign of strength either.

Moving on to this week, the last, large chunk of Q3 earnings reports hit the wires, along with a handful of economic datasets:

• Tuesday = October CPI Inflation data
• Wednesday = October PPI Inflation data & Retail Sales data
• Thursday = Philly Fed Manufacturing data

And last and least, there are a total of 14 U.S. Federal Reserve speaker events to enjoy!

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, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of November 5th = Uptrend

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

ANALYSIS
The stock market outlook flipped to an uptrend last week, with 2 of 3 signals showing bullish price action. There is a lot of volatility beneath the market’s surface, so tread carefully this week.

The S&P500 ($SPX) ramped 5.9% last week, with the index logging one of its best weekly of gains this year. The index starts this week just above the 50-day moving average.

SPX Price & Volume Chart for the Week of Oct 29 2023

The ADX directional indicators flipped bullish on Thursday, after the SPX gapped above the 200-day moving average.

Price/volume flipped to mixed on Thursday, based on a rally start Monday and a follow-through on Day 4 (Thursday).  With price breaching the 50-day moving average on Friday, the signal is in an uptrend to start the week.

Elliott Wave analysis shows a counter-trend rally in progress, but the higher-level wave count isn’t clear just yet.

SPX Elliott Wave Analysis for the Week of Nov 05 2023

Since it’s the first post of the month, so lets revisit the long-term view.  Dropping the bullish count coincided with a revisit of Elliott Wave guidelines and rules, particularly those related to Wave 4 overlaps with Wave 1.  As a result, the new count puts the SPX in the final wave sequence (Primary [C]) of the bear market that started in late 2021.

Last week’s rally coincided with a bullish crossover in the MACD, suggesting the current downward wave completed and a relief rally takes the SPX back towards 4500. The lack of a positive convergence for the RSI(5), prior the current overbought condition, suggestions the index remains within the downtrend, and another test of the October lows is coming.  The volatility of the price movement last week suggests a corrective wave, so we’ll go with the former, for now.

SPX Elliott Wave Analysis for the Week of Nov 05 2023

In both cases, the SPX should test support between 4200-4250 within the next week or so.

COMMENTARY
Market participants were in a buying mood last week, as evidenced by the high trading volumes and overnight gap ups.  In the U.S., the FOMC held rates constant.  Many analysts now expect that the hiking cycle is over; which means that rate cuts are closer. Even a bearish speech wasn’t enough to keep rates from selling off on the expectation of future cuts.  U.S. jobs data was a bit worse than expected, in that there weren’t as many job openings as expected.

The “earnings recession” continues in Q3.  Yes, some companies are inline or beating expectations.  But those expectations have been lowered throughout the year.  If you compare year over year earnings, the picture is abysmal.  Forward guidance has been the catalyst for many overnight moves in individual names.

Be on the lookout for more sales events this holiday season, as companies look to ramp up their 4th quarter numbers.  Amazon has already had 2 massive sales events (Prime days in July, and Prime “Big deal” days in Oct.), ahead of the “normal” Black Friday event later this month.

We could see an exciting week in the U.S. Treasury market, with several speeches from FOMC officials this week, including 2 from Powell.  Not to mention over 1,000 corporate earnings reports.

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, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Stock Market Outlook entering the Week of October 29th = Downtrend

• ADX Directional Indicators: Downtrend
• Price & Volume Signals: Downtrend
• Elliott Wave Analysis: Downtrend

ANALYSIS
The stock market outlook shows a downtrend firmly in place, with all three signals highlighting bearish action.

The S&P500 ($SPX) fell 2.5% last week, as the index lost support at the 200-day moving average.

SPX Price & Volume Chart for the Week of Oct 29 2023

The ADX directional indicators maintain a downtrend signal.  Price/volume is also in correction mode, with a high level of institutional selling over the past 2 weeks.

Elliott Wave analysis also moves to a downtrend.  The longer-term bullish count we’ve been tracking this year was invalidated last week, as the SPX fell through the 4195 price level (the Minor 1 high on Jan 30).  The SPX will eventually reestablish a bullish view going forward, but for now the bearish count is now dominant.

SPX Elliott Wave Analysis for the Week of Oct 29 2023

COMMENTARY
PCE data showed inflation moderated in September, increasing +3.4% y/y vs. +3.4% in August.  Core PCE came in at +3.7% y/y, vs. +3.8% in August.

The “advanced” 3rd quarter GDP data also came out last week, showing the U.S. economy grew at +2.9% verses Q3 in 2022.  The 4.9% figure quoted by media outlets is the change versus Q2 2023.  More than likely, both figures will be revised lower in November, when the “second” estimate is released.

In addition to an onslaught of earnings reports, the latest employment reports hit the wire this week (JOLTS, ADP, NFP).

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, Federal Reserve Bank of St. Louis, Hedgeye, Stockcharts.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Invest Safely, LLC is an independent investment research and online financial media company.  Use of Invest Safely, LLC and any other products available through invest-safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.