Weekend Stock Market Outlook
Stock Market Outlook For The Week of
January 19th = Uptrend
ADX Directional Indicators: Uptrend
Price & Volume Action: Uptrend
Objective Elliott Wave Analysis: Uptrend
The stock market outlook continues to signal an uptrend. The ADX, price/volume, and OEW indicators remain bullish.
2020-01-19 - SPX Trendline Analysis - Daily
At the start of 2018, we noted that the S&P was trading ~14% above it's 200 day moving average. At the time, that seemed a bit high, and I noted that the downside risk (i.e. falling back to the 200-day) was higher than the upside potential (e.g. rising to 20% above the 200-day).
Right now, the S&P is 11.2% above it's 200 day moving average. This fact doesn't mean we'll see a sell-off tomorrow. It just means the probability of a sell-off is increasing in the near term and the probability of further upside is decreasing, from a historical perspective.
2020-01-19 - SPX Trendline Analysis - Weekly
Another week, another deluge of headlines. First and foremost, it's earnings season again, so watch out for surprise changes in forward guidance. Stock prices are very sensitive to downward revisions of future earnings...even if current earnings are better than expectations.
The U.S.-China Phase 1 trade deal was signed, which should eliminate some uncertainty. That said, there's still the matter of implementation and enforcement...not to mention that there are still tariffs on two-thirds of U.S. imports from China. So we're not done yet; maybe just until the U.S. elections in November. Also on the trade front, a revamped North American trade agreement passed the Senate.
All U.S. markets are closed on Monday in observance of Martin Luther King, Jr. Day.
Best to your week!
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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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