The Safe Investing Blog

Stock Market Outlook entering the Week of December 13th = Uptrend

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

ANALYSIS

The stock market outlook remains in an uptrend, despite the small sell-off last week.

2020-12-13-SPX Trendline Analysis-Daily

The S&P500 ($SPX) is still extended from the 200-day moving average (~13%). But uptrend signals remain in place for both ADX directional indicators and price/volume action.

2020-12-13-SPX Elliott Wave Analysis-Daily-Primary1

Elliott Wave remains in an uptrend.

COMMENTARY

In the U.S., elected officials can’t find common ground for another round of fiscal stimulus, and the unemployment situation is deteriorating as coronavirus cases spike. The E.U., Brexit talks continue, but both sides have hedged, stating that a no-deal Brexit is likely.

And the overall stock market remains very over-valued (CMG blog), on both a Price to Earnings and Market Cap to GDP basis.

None of that has stopped the markets as they march higher, led by small capitalization stocks. Typically, small caps don’t lead markets higher during bear markets, or even late stage bull markets. And cyclical companies, like energy and financials, have also performed well, signaling an expectation of further economic recovery.

Keep working your plan, raise your sell stops to protect against a sudden drawdown, and try to enjoy the holidays.  We’ve all earned it!

Best to Your Week!

Stock Market Outlook entering the Week of December 6th = Uptrend

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

ANALYSIS

The stock market outlook kicks off the last month of 2020 in an uptrend.

2020-12-06-SPX Trendline Analysis-Daily

The S&P500 ($SPX) starts the week at all time highs. The ADX and price/volume both remain in uptrends, though the trend isn’t very strong (ADX) and we’ve picked up some distribution days (price/volume).

The index is also ~14.5% above the 200-day moving average; remaining in extended territory verses historical performance.

2020-12-06-SPX Elliott Wave Analysis-Daily-Primary1

Elliott Wave remains in an uptrend. The negative divergence mentioned last week was short lived. And the updated monthly view now reflects the Primary 1 count. Interesting to note there are substantial negative divergences in both the RSI and the MACD histogram right now.

2020-12-06-SPX Trendline Analysis-Weekly

The monthly view is updated to reflect the change to a Primary 1.  Interesting to note there are substantial negative divergences in both the RSI and the MACD histogram right now, and prices extended above the megaphone pattern mentioned last month.

COMMENTARY
November was a great month for the stock markets, with the S&P gaining 13%.  Good news related to the pandemic didn’t hurt (coronavirus vaccines allow investors to focus on “when” no “if” the economy reopens).

That’s not to say things are all good just yet.  The latest unemployment report underwhelmed, thanks to a surge in cases during the month.  We still don’t have additional fiscal stimulus, but any further weakness will likely force lawmakers to compromise.

December is usually a good month for stocks…I’m sure everyone is looking forward to a Santa Claus rally!

Best to Your Week!

P.S. Great articles on the economy from Steve and John this week on debt, interest rates, and the challenges we face going forward; definitely worth your time.

What do we do now? – https://www.cmgwealth.com/ri/on-my-radar-what-do-we-do-now/
Elites on the Edge – https://www.mauldineconomics.com/frontlinethoughts/elites-on-the-edge

Stock Market Outlook entering the Week of November 29th = Uptrend

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

ANALYSIS

The stock market outlook shows the uptrend remains in place to start this week.

2020-11-29-SPX Trendline Analysis-Daily

The S&P500 ($SPX) rallied last week, ended just shy of all time highs. The ADX and price/volume both remain in uptrends, but the S&P is STILL extended from the 200-day moving average (~13.5%).

2020-11-29-SPX Elliott Wave Analysis-Daily-Primary1

Elliott Wave remains in an uptrend, but we’ve got a negative divergence in the RSI and the MACD weakened.

Even though the signals are still green, there’s more downside risk than upside potential at this point. That doesn’t mean the S&P couldn’t go higher before another sell-off, only that now is a good time to take profits!

COMMENTARY
More positive news on the vaccine front last week, coupled with holiday trading volumes, gave the markets a push.  The Dow Jones hit 30,000, which is impressive considering where it was in March.

It looks like travel also increased in the U.S. last week; unfortunately, that also means we’re likely to see another surge in coronavirus cases over the next 10 days or so.

Best to Your Week!