Weekend Stock Market Outlook

Stock Market Outlook For The Week of
February 16th = Uptrend


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


The stock market outlook starts this week in an uptrend. The ADX directional indicators remain bullish, price/volume remains mixed, and OEW is switched back to an uptrend early last week, per their charts on stockchart.com.

Sadly, the OEW blog is shutting down. Per the site:

    For the time being the blog will remain open for reference and educational purposes, however the weekend reports will not for the foreseeable future.

Tony's family did a great job stewarding the site over the past 12 months, and the expertise will be missed. Private lessons and tutoring is still available, but for the purposes of Invest Safely posts (to use public information to provide an example for monitoring the market), we'll need to find an alternative.

Technical analysis of daily SPX prices

2020-02-16 - SPX Trendline Analysis - Daily

The S&P starts the week right at all time highs. Price is 3.8% above the 50-day moving average and 11.5% above the 200-day. Coincidentally, the moving averages are aligned with trendlines from recent lows, shown in the daily and weekly price charts.

Technical analysis of weekly SPX prices

2020-02-16 - SPX Trendline Analysis - Weekly

News media is finally admitting there will be an economic impact from the coronavirus in China. City lock downs, factory shutdowns and travel bans can only go on so long before production takes a hit, especially considering that China is the second largest economy in the world and consumes more than 50% of the world's commodities (i.e. iron, steel, aluminum, copper).

Before we get carried away, they also say the effect will be minor/temporary, and everything will be okay by Q3. As we discussed, it's not a matter of if...it's a matter of how long and how much. Until companies actually report their numbers this summer and fall, we won't know for sure, so watch prices!

In either case, I have no doubt the Chinese government will unleash a massive amount of stimulus into it's economy to try and recover. I wouldn't rule out outright purchase of stock. I think we can safely expand the U.S. focused saying "Don't fight the Fed" to a more globally focused "Don't fight central banks"!

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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