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  5. Stock Market Outlook - 2021-09-05

Stock Market Outlook
For The Week Of September 5th = Uptrend


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


The stock market outlook kick's off September in an uptrend; can it hold through the notoriously volatile month?

The S&P500 ($SPX) opens this week ~3% above the 50-day moving average and ~10% above the 200-day moving average...stop me if you’ve heard this before. The index is riding the upper limit of the bullish price channel we've been tracking.

Technical analysis of daily SPX prices

2021-09-05-SPX Trendline Analysis - Daily

All three signals remain green. The ADX is bullish and shows a strengthening trend. The price vs. volume action is stable. 2 distribution days fell off the count, leaving a total of 4 that are evenly distributed over the past 5 weeks.

Technical analysis of daily SPX prices

2021-09-05-SPX Elliott Wave Analysis - Daily - Primary 1

The Elliott Wave remains in the iii-wave uptrend, as does the negative divergence in the RSI. The MACD isn’t giving away any hints on market direction.


This week's post is a bit late; appreciate your patience. We've got a shortened trading week on tap, with U.S. stock exchanges closed on Monday for the Labor day holiday.

Typically, September is the S&P500's worst month in terms of performance, with the second highest level of volatility (October takes that honor). So even if the S&P500 ends on a positive note, it's probably isn't going to take the straightest path to get there. Prepare yourself accordingly!

Last Friday, the monthly job data came in WAY below expectations, and a lot of ink was spilled about what that "means". But a few weeks back, we touched on the concept of stagflation, and what to watch instead of unemployment:

    Expect a lot of hyperventilating about the Fed, interest rates, inflation, and employment in the coming weeks, leading up to the Fed meeting in Jackson Hole next month. None of it will be really useful for your decision making. Instead, take a step back and see the forest for the trees, and watch GDP and consumer spending.

The more interesting, less widely publicized news from Friday was the NY Fed's decision to "suspend" it's GDP model due to "data irregularities". Hopefully those issues are contained to just the New York branch of the Fed, and don't spill over to other models. The final Q3 GDP numbers, and the initial Q4 numbers, scheduled for release at the end of October (10/27 and 10/29). Remember that July's retail sales declined 1.1%, worse than the expected drop of 0.3%.

With the S&P500 up 20% or so, year to date, there's nothing wrong with taking some of that profit and putting it into inflation/stagflation hedges.

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 historical Elliott Wave Analysis, go to ELLIOTT WAVE lives on by Tony Caldaro. Other interpretations can be found at: Pretzel Logic, Daneric's Elliott Waves, and 12345ABCDEWXYZ

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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