Weekend Stock Market Outlook

Stock Market Outlook For The Week of
November 3rd = Uptrend


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


The stock market outlook continues to show an uptrend.

The ADX and OEW remain bullish. Price and volume is still mixed, but a handful of distribution days will fall off this count this week, so you could be forgiven for thinking this signal shows an uptrend at this point.

Technical analysis of daily SPX prices

2019-11-03 - SPX Trendline Analysis - Daily

Looking at the daily ($SPX), and the weekly for that matter, prices broke out from the bullish pennant / ascending triangle pattern we've been tracking, with the former ATH in July acted as price support last week.

Using the June low, a completed break-out from this pattern would travel ~280 points (the June low to the July high), putting a target right around 3,300 for the S&P500. Coincidentally, that's been OEW's target for completion of the current wave pattern.

Technical analysis of weekly SPX prices

2019-11-03 - SPX Trendline Analysis - Weekly

Last week's call that the index looked overbought, based on the RSI, was totally wrong. Turns out, I hadn't updated my timeframe when looking at the chart, so the RSI was way off. As with everything you see on the internet, trust but verify!

Q3 earnings season remains mixed; strong earnings are getting rewarded and weak earnings are getting punished, price-wise. October's jobs report came in better than expected, while the ISM manufacturing index showed contraction again.

And the U.S. Fed lowered rates by 0.25% last week. The bigger change was the statement that rates wouldn't increase again until they see significant signs of inflation (i.e. >2%). Sadly, this will hurt savers and retiree's the most, as they'll continue to be forced into more volatile asset classes in search of higher yields.

The underlying hope is that lower rates and other stimulus will allow us to "grow" our way forward, which would allow capital gains to offset lower yields. Or, they'll need to increase the amount of risk they take in order to maintain the same level of income...if that's even an option.

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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