Weekend Stock Market Outlook

Stock Market Outlook For The Week of
November 4th = Downtrend


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


Prices for U.S. stocks bounced and indexes finished up for the week. With midterm elections Tuesday, it's anyone's guess how market prices will respond with the votes are tallied. And we have a Fed meeting this week.

All the indexes continue to trade at or 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

2018-11-04 - US Stock Market Averages

The price/volume signal remains in a downtrend. Now that the indexes have rallied a bit, start looking for a follow-through day (1.5% gain on higher than average trading volume), which would change this signal back to an uptrend. Thursday was close, but couldn't pull through.

OEW maintains a downtrend signal, but:

    "the decline from SPX 2941 to 2604 might have ended the first downtrend...and a potential...uptrend is now underway."

The S&P ($SPX) appears to have bottomed just above 2600. On Friday, prices tested the 200 day moving average.

2018-11-04 - $SPX Technical Analysis - Daily

2018-11-04 - SPX Technical Analysis - Daily

Last week we mentioned a change in the character of the market, in terms of volatility. I received an email asking how to visualize that "change". Many people use the VIX (see above). But if you're looking for something more specific to the index or stock you're following, try the Average True Range indicator; I actually calculate within one of my mechanical trading systems.

2018-11-04 - $SPX Technical Analysis - Weekly

2018-11-04 - SPX Technical Analysis - Weekly

My opinion is still that the SPX will test support around 2581, but now it appears it will claw back some of the decline first. We could even see 2875 before selling off again. I imagine the price action could look similar to what occurred between the February and April lows.

Again, use your process to determine what and when to buy or sell. Per OEW:

    "...the four major US indices have not confirmed bear markets yet. We may not see a bear market confirmation in the US until the bear market is nearly over. That’s what happened in 2016, and is part of the reason we were caught off guard at that low."

Participate. Protect. Prepare.

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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.