Weekend Stock Market Outlook

Stock Market Outlook For The Week of
September 4th = Uptrend


20/50/200 Day Moving Averages: Uptrend
Price & Volume Action: Mixed
Objective Elliott Wave Analysis: Uptrend


US stock indexes saw some selling last week; not enough to change the market outlook, but enough to create raise concern and uncertainty about future performance.

On the positive side, 3 of the 5 major stock market averages regained their 20-day moving averages due to Friday's price jump, and all remain above their respective 50 and 200 day averages.

2016-09-04-US Stock Market Averages

2016-09-04-US Stock Market Averages

On the negative side, selling pressure continues to increase (the # of distribution days doubled last month). And Friday's price gains were on low trading volume. The combination of higher volume selling and lower volume advances is a worrisome development as we head into September, but not enough to completely derail the current uptrend.

So far, we've only seen about half of the 5% correction expected by OEW. The latest analysis says that we may not see the full 5% may not materialize in the short-term (Weekend Update).

As mentioned last week, remember to watch your holdings. Consider tightening your stop orders to recent support levels, or take some profits if you've hit your targets.

  • Growth strategy: Book your profits if they're over 20%. Between 0% and 20%, check key support levels; if your profits would be wiped out before stock prices reached support, consider selling at least half your position.
  • Income strategy: check your position size and consider selling shares to if any one position has become too dominate (>5% of your total portfolio). Also, make sure the fundamentals are still strong (payout ratio, earnings per share, price/earnings ratio, etc.).

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro. Charts provided courtesy of StockCharts.com.