Weekend Stock Market Outlook

Stock Market Outlook For The Week of
October 28th = Downtrend


20/50 Day Moving Averages: Downtrend
Price & Volume Action: Downtrend
Objective Elliott Wave Analysis: Downtrend


The 200 day moving average was the latest support level to fall in what is a REALLY red October. The only good news seems to be that everyone thinks the markets are highly oversold and should bounce from the current levels. But isn't the consensus usually wrong? Remember to follow your buy and sell rules, not the talking heads. When the selling is over, there will be great buying opportunities.

All the indexes continue to trade below their 20 and 50 day moving averages, keeping this signal in a downtrend.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-10-28 - US Stock Market Averages

Since prices continue to fall on higher than average volume, the price/volume signal remains in a downtrend too.

OEW also continues with a downtrend signal. They're also stating that we're very oversold, and expect a brief rally in the near term.

The S&P ($SPX) fell well below the 200 day moving average last week. The character of the US markets has shifted during October and from the chart you can clearly see the old adage in action; prices take the stairs on their way up and the elevator on their way down. More than likely we'll see a test of the April low price level within the next two weeks or so.

2018-10-28 - $SPX Technical Analysis - Daily

2018-10-28 - SPX Technical Analysis - Daily

Expanding the view, you can see that January 2016 was last time the SPX closed substantially below the 200 day / 40 week moving average. At some point, the lower stock prices will bring in big institutions...so watch for trading volume cues.

2018-10-28 - $SPX Technical Analysis - Weekly

2018-10-28 - SPX Technical Analysis - Weekly

I took my own advice and checked my watch list. It wasn't pretty. But there are a few names that have held up well, relative to the overall market. And those names are the ones I'm watching closely for signs that the selling is complete.

Participate. Protect. Prepare.

If you find this research helpful, please tell a friend. If you don't find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has performed as a stand-alone, signal generator using past performance estimates:

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