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  5. Stock Market Outlook - 2020-06-07

Stock Market Outlook
For The Week Of June 7th = Uptrend


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


The stock market outlook remains in an uptrend this week, with all three signals showing green.

Technical analysis of daily SPX prices

2020-06-07-SPX Trendline Analysis - Daily

Stocks were on fire last week. The S&P500 ($SPX) sits ~11% above the 50-day moving average, and ~6% above the 200 day moving average. For some perspective, the S&P was just 1.5% above the 200 day moving average last week!

The bullish trend shown by the ADX is strengthening. And price/volume action remains positive, with no sign of heavy selling recently.

The market made also swift work of last week's update to Elliott Wave, blasting past 3041 and invalidating the count I was showing, not to mention several others.

Technical analysis of daily SPX prices

2020-06-07-SPX Elliott Wave Analysis - Daily - Intermediate C

It looks like the S&P either:

  1. Completed an irregular B wave at the May low, and is in the middle of the C wave.
  2. Is still in the A wave

Technical analysis of daily SPX prices

2020-06-07-SPX Elliott Wave Analysis - Daily - Intermediate A

Both these scenarios remain valid until we reach all time highs. If we get back to 3393, then we'll have to re-evaluate the Feb-Mar decline. Some are already relabeling that decline as the entire downtrend, with the bull market back in full swing.


On the back last week's cautionary post, U.S. stocks rallied. Hard. It's amazing what Fed-backed markets can do! And a completely surprising jobs report doesn't hurt either. According to the U.S. Labor Department, the economy gained ~2.5 million jobs in May, and the unemployment rate fell to 13.3%.

It's hard to believe, but the S&P 500 is just about even for the year! That said, not every sector has recovered equally. There was a lot of "bottom-fishing" last week, with sectors like airlines outperforming stronger names.

The S&P is now 45% above the March low, so odds are you have some nice gains if entered new positions in the month of April when the new uptrend started. If you've hit your targets, don't get greedy...ring the register and lock-in some of your gains.

Best to your week!

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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.

Charts provided courtesy of stockcharts.com.

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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