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  5. Stock Market Outlook - 2020-11-22

Stock Market Outlook
For The Week Of November 22nd = Uptrend


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


The stock market outlook continues to show an uptrend in place to start this week.

Technical analysis of daily SPX prices

2020-11-22-SPX Trendline Analysis - Daily

The S&P500 ($SPX) retreated last week, but the ADX and price/volume both remain in uptrends; we haven’t’ seen much high-volume selling either.

Price found support near the 13-day moving average, but the S&P is still extended from the 200-day moving average (~12% which is high historically).

And the EW uptrend signal remains in place.

Technical analysis of daily SPX prices

2020-11-22-SPX Elliott Wave Analysis-Daily-Primary 1


Last week was very similar to the week prior; continuing growth in the number of coronavirus cases and hospitalizations, while Moderna and then Pfizer reported positive results from their late stage trials of a vaccine. But jobless claims were worse than expected, highlighting the fact that the economy still has some work to do to catch up to a market at all time highs.

The focus on a post-pandemic world has also shifted money flows, resulting in sector rotation this month. Energy-related stocks have fared the best, followed by financials (i.e. banks), which have been the two worst performers during the recession. Technology and consumer discretionary (the big winners from the pandemic) have basically been flat.

With markets near all time highs and a vaccine on the horizon, now is a good time to check your allocations. Stocks that have lead the market higher may be dominating your portfolio, whether you hold them outright or as part of an index fund (e.g. Amazon, Target, Google, etc.). As the economy recovers, so called "value" stocks (e.g. utilities, financials) are likely to overperform, so you'll want to ensure you have the best companies across a wide variety of sectors.

Since this will be a shortened trading week in the U.S. due to the Thanksgiving holiday, consider tightening your stops to avoid any unpleasant surprises!

Best to Your Week and Happy Thanksgiving!

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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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