2021-01-17-SPX Trendline Analysis - Daily
The S&P500, ($SPX) closed its gap to the 200-day moving average, but still sits more than 10% above that level. Price found some support at the bottom of a potential channel on Friday.
The ADX continues to show a bullish trend, but that trend has weakened since December. With a reading under the 20-25 range, there isn't much of a trend to follow anyway. And we picked up two distribution days in succession last week; not enough to change the signal, but not the best price action either.
2021-01-17-SPX Elliott Wave Analysis - Daily - Primary 1
Elliott Wave also remains in an uptrend, though some analysts think we may have just completed a minor wave, given the divergence in the RSI and the MACD histogram inflection/cross-over.
It's that start of earnings season, which should make some some interesting price action over the next few weeks.
The incoming Biden administration released a $1.9 trillion fiscal-stimulus plan, and not a moment too soon, as jobless claims are coming in higher than anticipated. Other headwinds include a slower than anticipated vaccine rollout and an increase is COVID cases after the holiday season.
A short week on tap, with U.S. markets closed Monday in observance of Martin Luther King Day.
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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