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  5. Stock Market Outlook - 2022-01-02

Stock Market Outlook
For The Week Of January 2nd = Uptrend


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


Happy New Year! The stock market outlook begins 2022 in an uptrend, after a fairly quiet week of trading.

The S&P500 ($SPX) eased into the New Year, drifting lower into the close and ending the week up just under 1%. For the year, the S&P was up 26.9%! The 6th highest annual return in the past 31 years!

Technical analysis of daily SPX prices

2022-01-02-SPX Trendline Analysis - Daily

The index sits ~2% above the 50 day moving average and ~9% above the 200 day moving averages.

The ADX shows a strengthening, albeit weak trend, with the directional indicators in bullish territory. With price above the 50-day moving average and a low number of distribution days, price/volume is in an uptrend.

Technical analysis of daily SPX prices

2022-01-02-SPX Elliott Wave Analysis - Daily - Primary 1

Elliott Wave starts 2022 off in an uptrend as well.


The S&P's performance in 2021 was impressive. In addition to the annual return mentioned above, the index also avoided pullbacks greater than 5% and reached 70 new all time highs.

That means the S&P spent the entire year within 5% of an all time high, and over a quarter of the year at hitting new record closes (70 days with an all time high / 252 trading days = 28% of the 2021 trading year)! Buy the Dip indeed.

That's not to say that everything went up all the time. Investors saw much more volatility in individual stocks, with many household names underperforming and/or losing money for the year, including Disney ($DIS), Verizon ($VZ), and Merck ($MRK). And let's not forget to mention more speculative trades like SPACs or meme themes.

I expect 2022 to underperform versus to 2021, but who knows...stranger things have happened.

Here's to another year of personal profits through safe investing!

Best To Your Week!

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Charts provided courtesy of stockcharts.com.

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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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