The stock market outlook uptrend continues; no change in the signals last week.
The S&P500 ($SPX) remains above key support levels, the ADX remains bullish, and institutional selling remains low.
2020-07-26-SPX Trendline Analysis - Daily
No change to the Elliott Wave count; the Minor 4 wave completed at the end of June, and the Minor 5 in progress since then. With the market selling off Thursday and Friday, it looks like S&P completed the (3) sub-wave last week. Based on this count, I wouldn’t expect prices to fall much further, since first waves and fourth waves aren’t allowed to overlap; (1) completed at 3184.
2020-07-26-SPX Elliott Wave Analysis - Daily - Intermediate A
All that said, now is not the time to be complacent. It's earnings season, and your favorite stock may just be one conference call away from a major selloff; just ask Intel shareholders.
Not the best week for equities. The E.U. agreed on a stimulus package, but that was about the only positive. The U.S. is still negotiating a second packages, but current benefits set to expire at the end of the week. Initial jobless claims increased for the first time since March.
As if Q2 earnings and a global pandemic weren't enough to keep markets occupied, geopolitical tensions came back into the headlines last week. The U.S. State Department ordered China to close its Houston consulate, alleging the site was part of a Chinese espionage effort using diplomatic facilities across the US. In response, China ordered the U.S. to close its consulate in Chengdu.
Earnings season kicks into high gear this week, with almost 40% of the S&P500 reporting.
Best to your week!
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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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