2020-12-13-SPX Trendline Analysis - Daily
The S&P500 ($SPX) is still extended from the 200-day moving average (~13%). But uptrend signals remain in place for both ADX directional indicators and price/volume action.
2020-12-13-SPX Elliott Wave Analysis-Daily-Primary 1
Elliott Wave remains in an uptrend.
In the U.S., elected officials can't find common ground for another round of fiscal stimulus, and the unemployment situation is deteriorating as coronavirus cases spike. The E.U., Brexit talks continue, but both sides have hedged, stating that a no-deal Brexit is likely.
And the overall stock market remains very over-valued (CMG blog), on both a Price to Earnings and Market Cap to GDP basis.
None of that has stopped the markets as they march higher, led by small capitalization stocks. Typically, small caps don't lead markets higher during bear markets, or even late stage bull markets. And cyclical companies, like energy and financials, have also performed well, signaling an expectation of further economic recovery.
Keep working your plan, raise your sell stops to protect against a sudden drawdown, and try to enjoy the holidays. We've all earned it!
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.
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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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