Weekend Stock Market Outlook

Stock Market Outlook For The Week of
October 27th = Uptrend


ADX Directional Indicators: Uptrend
Price & Volume Action: Mixed
Objective Elliott Wave Analysis: Uptrend


The stock market outlook maintains an uptrend rating heading into this week. Nothing like some positive trade war rumors and "non-QE" QE to help markets along.

The ADX show bullish price action, and OEW remains in an uptrend. Price and volume remains mixed; a few more distribution days need to fall off the count before that signal returns to an uptrend.

Technical analysis of daily SPX prices

2019-10-27 - SPX Trendline Analysis - Daily

Taking a look a the daily price chart, the S&P broke above the resistance trendline. That price action may also signal a break-out from the bullish pennant pattern. The index came within 1 point of its all time high (~3028), set back in July.

The S&P appears "over-bought", in terms of the relative strength indicator (not shown). That suggests a pullback could occur; maybe to the 50-day moving average, maybe to the support trendline we've been plotting.

The same set-up can be seen in the weekly view.

Technical analysis of weekly SPX prices

2019-10-27 - SPX Trendline Analysis - Weekly

The S&P weathered October well, and appears primed for a year-end rally. CNBC reported that the U.S. and China are finalizing parts of a phase-one trade deal, which will send stocks higher. Those overnight lending issues continue to cause the Fed problems, so they announced an increase in bond purchase (which was called qualitative easing last time, but isn't called qualitative easing this time).

Earlier this year, OEW analysis said the following:

    Our first logical target for Minor 3 completion would be equal to Minor 1, which projects...to over the 3300 level.
That would imply the markets have another 10% rally in them before we see a major sell-off.

If you're looking at individual stocks, watch those earning reports! I'm seeing a lot of volatility when stocks with strong fundamentals report. You know how frustrating it is to see a stock hit trip your sell signal, only to rally back strongly in the next day or two! If you're concerned about initiating a position ahead of earnings, options are one way to reduce your risk.

Best to your week!

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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