Weekend Stock Market Outlook

Stock Market Outlook For The Week of
February 17th = Uptrend


ADX Directional Indicators: Uptrend
Price & Volume Action: Uptrend
Objective Elliott Wave Analysis: Best to Your Week


The uptrend rolls on; no change in the technical picture, ADX, or price and volume.

Tony Caldaro, the proprietor of OEW, passed away early last week. He will be missed. We've lost a wealth of objective knowledge and insight, freely shared. It's unclear what will happen with the public-facing OEW blog; Tony had many students, so it's possible that one of them will step up and pastor the flock, so to speak. For now, we'll use the sign off from Tony's public blog posts as the signal and send our prayers to his family.

In the weekly view, S&P ($SPX) prices closed at the highs, again, so still no higher "low" to use for drawing the new uptrend.

2019-02-17 - $SPX Trendline Analysis - Weekly

2019-02-17 - SPX Trendline Analysis - Weekly

Switching to a daily view, prices spent most of the week flirting with the 200-day moving average, finally pulling away on above average volume Friday. I've laid in a potential uptrend, based on the most recent "low". Next up, the resistance level just above 2,800.

2019-02-17 - $SPX Trendline Analysis - Daily

2019-02-17 - SPX Trendline Analysis - Daily

The DI+ / DI- continues to show a bullish environment. No change in price/volume; the markets are still in rally mode (above the 50 day moving average, limited institutional selling).

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX

2019-02-17 - US Stock Market Averages

An interesting blog post titled, “Putting this Rally Into Historical Context” by Bryce Coward (CFA) at Knowledge Leaders Capital sheds give us some historical context for the current rally (hat tip to Steve Blumenthal over at CMG):

    Several weeks ago we did some research to find out what a typical rally looks like after a big waterfall-like decline takes place. The takeaway was that the rallies after those waterfall declines have lasted anywhere from 1 to 74 days and have retraced 20-90+% of the initial decline. That’s quite a wide range in both duration and magnitude of the move, but a universal similarity was that in 19 of 19 post-war instances of a 15% uninterrupted decline (excluding the current one), the stock market ended up testing the waterfall low in some fashion.

Of course, an outlier is possible...there's a first time for everything and all that. Near- term, getting back above the 200-day is an important step in the recovery. But we can't give the all clear just yet.

Participate. Protect. Prepare.

Don't forget to check out the 2018 performance review.

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.

Charts provided courtesy of stockcharts.com.

If you're interested in learning more about the relationship between price and volume, or how to find and trade the best stocks for your growth strategy, check out this book on Amazon via the following affiliate link: How to Make Money in Stocks: A Winning System in Good Times and Bad. It's one of my favorites.

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.

Once a year, I review the market outlook signals as if they were a mechanical trading system, while pointing out issues and making adjustments. The goal is to give you to give you an example of how to analyze and continuously improve your own systems.

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