1. Invest-Safely.com
  2. >>
  3. Tracking the Stock Market
  4. >>
  5. Stock Market Outlook - 2022-02-20

Stock Market Outlook
For The Week Of February 20th = Downtrend


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


The stock market outlook remains in a downtrend after another down week for U.S. equities. The S&P500 ($SPX) briefly reclaimed the 200-day moving average mid-week, before plunging back below that level ahead of the long weekend. The index currently sits ~5% below the 50-day moving average and 2.5% below the 200-day.

Technical analysis of daily SPX prices

2022-02-20-SPX Trendline Analysis - Daily

The ADX signal continues to show a bearish trend in place. A few more distribution days fell off the count, but the price/volume signal still shows a downtrend too.

Elliott Wave also shows a downtrend, with two possible counts depending on your level of bearishness. I discovered a bullish count as well...possible, but not probable as of today.

Technical analysis of daily SPX prices

2022-02-20-SPX Elliott Wave Analysis - Daily - Primary 2 - Intermediate A

The first bearish count has the market in the 3rd wave ( Minor 3 ) of the first down wave of Primary [2] (Intermediate (A) ). This count implies the downtrend is just getting started. This count would be invalidated if the SPX rises above 4450.

Technical analysis of daily SPX prices

2022-02-20-SPX Elliott Wave Analysis - Daily - Primary 2 - Intermediate C

The second bearish count has the market in the 3rd wave (Minor 3) of the third down wave of Primary [2] (Intermediate (C) ). This count implies the downtrend is more than halfway complete. This count would be invalidated if the SPX rallies above 4450.

Technical analysis of daily SPX prices

2022-02-20-SPX Elliott Wave Analysis - Daily - Primary 3

And the bullish count shows the SPX completed the entire Primary [2] back on Jan. 24th, and is currently working through the first correction of the new uptrend (The Minor C wave of Intermediate (2) ). This count would be invalidated if the SPX falls below 4222.


The Russia-Ukraine situation continues to drive uncertainty into the markets, with each day seeming to to unearth a new set of will they/won't they narratives.

Russia's a global player in the energy market, so it's no surprise that a potential conflict is driving up energy prices. Terrible for consumers and inflation; great for investments allocated to the energy sector.

No surprise rate hike from the Fed's emergency meeting last week, which is a good thing. And the hysteria around a potential half point rate hike died down as well.

But the Fed's job doesn't get any easier, as each of the next 4 weeks has potentially market moving data releases. First, we'll have to see what happens on Thursday (24th) when GDP is released. Keep in mind that the change verses last year is the most important number, as it will tell us if growth is starting to slow.

Shortly thereafter is the next jobs report (Friday, March 4), and then the next inflation reading (Thursday, March 10). All of which will need to be digested by the Fed, prior to releasing the actual size of the next interest rate hike on March 15-16th.

Best To Your Week!

If you find this research helpful, please tell a friend. If you don't find it helpful, tell an enemy.

I regularly share articles and other news of interest via on Twitter (@investsafely), Facebook, Linkedin, and Instagram (@investsafely)

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.

Invest Safely, LLC is an independent investment research and online financial media company. Use of Invest Safely, LLC and any other products available through invest-safely.com are subject to our Terms of Service and Privacy Policy. Not a recommendation to buy or sell any security.

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, 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.

This material is for general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, or other such purpose. Certain information contained herein has been obtained from third-party sources believed to be reliable, but we cannot guarantee its accuracy or completeness.
To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisors of his/her choosing. Invest Safely, LLC is not a law firm, certified public accounting firm, or registered investment advisor and no portion of its content should be construed as legal, accounting, or investment advice.
The material is not to be construed as an offer or a recommendation to buy or sell a security nor is it to be construed as investment advice. Additionally, the material accessible through this website does not constitute a representation that the investments described herein are suitable or appropriate for any person.
Hypothetical Presentations:
Any referenced performance is “as calculated” using the referenced funds and has not been independently verified. This presentation does not discuss, directly or indirectly, the amount of the profits or losses, realized or unrealized, by any reader or contributor, from any specific funds or securities.
The author and/or any reader may have experienced materially different performance based upon various factors during the corresponding time periods. To the extent that any portion of the content reflects hypothetical results that were achieved by means of the retroactive application of a back-tested model, such results have inherent limitations, including:
Model results do not reflect the results of actual trading using assets, but were achieved by means of the retroactive application of the referenced models, certain aspects of which may have been designed with the benefit of hindsight
Back-tested performance may not reflect the impact that any material market or economic factors might have had on the use of a trading model if the model had been used during the period to actually manage assets
Actual investment results during the corresponding time periods may have been materially different from those portrayed in the model
Past performance may not be indicative of future results. Therefore, no one should assume that future performance will be profitable, or equal to any corresponding historical index.
The S&P 500 Composite Total Return Index (the "S&P") is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Standard & Poor's chooses the member companies for the S&P based on market size, liquidity, and industry group representation. Included are the common stocks of industrial, financial, utility, and transportation companies. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual in determining whether the performance of a specific portfolio or model meets, or continues to meet investment objective(s). The model and indices performance results do not reflect the impact of taxes.

Investing involves risk (even the “safe” kind)! Past performance does not guarantee or indicate future results. Different types of investments involve varying degrees of underlying risk. Therefore, do not assume that future performance of any specific investment or investment strategy be suitable for your portfolio or individual situation, will be profitable, equal any historical performance level(s), or prove successful (including the investments and/or investment strategies describe on this site).