The Safe Investing Blog

Market Outlook entering the Week of August 16th = Downtrend

MOVING AVERAGES

• Short-term (20 DMA): Downtrend
  All major stock market averages remained below their 20-day moving averages.

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

• Long-term (200 DMA): Mixed 
  2 of the 5 major stock market averages remained above their 200-day moving averages.  The Russell 2000, NYSE and DJIA remained below.

COMMENTARY
A lot of price action last week, but we’re basically back to where we started last week, so the downward market outlook remains unchanged from last week.

That said, we’re still range-bound and not a lot has happened with regard to technical support and resistance levels:

• Resistance:  2,085 / 2,131
• Support:  2,019 / 2,070

Tony C. used the S&P500 and calculated 3 potential price-levels for resolving the current market weakness:  2040, 2019, and 1820.

Dropping to the 1820 price level would qualify as the long-awaited correction, while bouncing off the 2019 and 2040 levels would just kick the correction down the road.  In other words, we’ll still run into a meaningful correction at some point, you’ll just have some more time to prepare.

With Friday’s close of 2091 and change, here’s the potential, short-term damage from each scenario:

• 2040 = 2.4% decline (~4% decline from 2131 high)
• 2019 = 3.4% decline (~5% decline from 2131 high)
• 1820 = 13% decline (~15% correction from 2131 high)

2015-08-16 – US Stock Market Averages

Sources:

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  For price/volume data, head to stockcharts.com.

Moving Average Signals:

• Uptrend=Market indexes remained above their moving average during the trading week
• Downtrend=Market indexes remained below their moving average during the trading week
• Buy signal=Market indexes fell below their moving averages during the trading week
• Sell signal=Market indexes rose above their moving averages during the trading week

Market Outlook entering the Week of August 9th = Downtrend

MOVING AVERAGES

• Short-term (20 DMA): Downtrend / Sell Signal
  All major stock market averages fell or remained below their 20-day moving averages.

• Intermediate (50 DMA): Downtrend / Sell Signal
  All the major stock market averages fell or remained below their 50-day moving averages.

• Long-term (200 DMA): Downtrend / Sell Signal
  2 of the 5 major stock market averages remained above their 200-day moving averages.  The Russell 2000 fell below, and the NYSE and DJIA remained below.

COMMENTARY
Now that all the stock indexes are below their 20 and 50 day moving averages, and a majority (3/5) are below the 200 day, the market outlook shifted to downtrend territory.

We dropped through one of last week’s support levels, so intermediate support/resistance levels from Objective Elliott Wave analysis also fell a notch:

• Resistance:  2,085 / 2,131
• Support:  2,019 / 2,070

The S&P500 needs to take out 2,040-2,045 support level before we can truly say we’re in a correction, but that label will come after the fact.  Let your stock prices do the talking and don’t profits turn into losses.  The last stock on my watch list got hammered last week, so it’s back to the drawing board.

2015-08-09 – US Stock Market Averages

Sources:

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  For price/volume data, head to stockcharts.com.

Moving Average Signals:

• Uptrend=Market indexes remained above their moving average during the trading week
• Downtrend=Market indexes remained below their moving average during the trading week
• Buy signal=Market indexes fell below their moving averages during the trading week
• Sell signal=Market indexes rose above their moving averages during the trading week

Market Outlook entering the Week of August 2nd = Mixed

MOVING AVERAGES

• Short-term (20 DMA): Mixed 
  3 of the 5 major stock market averages rose above their 20-day moving averages.  The DJIA, Russell 2000 remained below.

• Intermediate (50 DMA): Mixed 
  2 of the 5 major stock market averages rose above their 50-day moving averages.  The NYSE, Russell 2000, and DJIA remained below.

• Long-term (200 DMA): Mixed 
  3 of the 5 major stock market averages remained above their 200-day moving averages.  The NYSE and DJIA remained below.

COMMENTARY
The markets bounced back last week, recovering some of their recent losses.  Trading volume wasn’t spectacular, an overall price is still range-bound.   The 20-dma is below the 50-dma for 4 of the 5 major indexes, which can indicate a trend reversal (i.e. downtrend).

Intermediate support/resistance levels from Objective Elliott Wave analysis remain unchanged from last week, which has been the case for most of 2015:

• Resistance:  2,131/ 2,198
• Support:  2,070 / 2,085

The S&P500 needs to take out 2,131 resistance level before we’ll see a meaningful uptrend, so the market outlook remains mixed.  More stocks in my portfolio hit sell triggers last week, and my watch list has only one stock left!

2015-08-02 – US Stock Market Averages

Sources:

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.  For price/volume data, head to stockcharts.com.

Moving Average Signals:

• Uptrend=Market indexes remained above their moving average during the trading week
• Downtrend=Market indexes remained below their moving average during the trading week
• Buy signal=Market indexes fell below their moving averages during the trading week
• Sell signal=Market indexes rose above their moving averages during the trading week