The S&P500 ($SPX) fell 2.1% for the week, unable to break free from the pull of the 50-day moving average.
2022-04-17-SPX Trendline Analysis - Daily
The ADX remains continues to signal a downtrend with the directional indicators growing more bearish over the week.
The price/volume signal shifts from an uptrend to mixed. SPX dropped below the 50-day moving average, and also closed below the April 18 follow-through day. Distribution days are also piling up (5), so a down day this week on elevated volume would put this signal into a downtrend, as well as the overall outlook.
2022-04-17- SPX Elliott Wave Analysis - Daily - Primary 2
For Elliott Wave, the count remains mixed. The bounce back to 4650 didn't happen. Instead, the SPX added a 5th wave down, and appears to have completed an impulse wave (rather than a corrective wave). Which means the March 29th high was the likely end of our bear market rally. If so, Minor Wave 2 should now take the market back towards 4650.
We got Consumer Price Index (CPI) data last week, and it showed that inflation remains high (duh).
#Inflation Numbers (Consumer Price Index)— Invest Safely (@investsafely) April 12, 2022
CPI Headline +1.2% M/M
CPI Headline +8.54% Y/Y (highest since Dec. 1981)
CPI Core +0.3% M/M
CPI Core +6.5% Y/Y (lower than expected)
Energy +48.3% Y/Y (!)
Food +10% Y/Y
Medical +2.9% Y/Y
Shelter +5% Y/Y
Not to be outdone, the Producer Price Index numbers (PPI) came in at an all time high: 11.2% year-over-year! Those increases haven't hit consumers yet.
The "good" news, if you can call it that, is inflation has probably peaked unless there's a massive shock. For y-o-y figures to continue rising, the price of oil needs to reach 180+. If that happens, we'll have things other than inflation to worry about.
Q1 earnings pick up speed this week, with Bank of America, Tesla, and Netflix reporting.
#earnings for the week— Earnings Whispers (@eWhispers) April 16, 2022
$TSLA $BAC $NFLX $HAL $SCHW $CLF $JNJ $AAL $SNAP $BK $T $LMT $NUE $PG $AA $IBM $VZ $ASML $UAL $JBHT $SYF $SIFY $SI $FCX $SLB $GNTY $HAS $LRCX $DOW $AXP $TFC $SBNY $ABT $TRV $UNP $PLD $PM $NDAQ $STLD $BKR $ISRG $CSX $ANTM $NEE pic.twitter.com/PqWkcv6vpB
Earnings season started off with a bang, as several companies reported better than expected earnings AND raise guidance. For example, Taiwan Semiconductor Manufacturing (TSM) crushed their numbers for the first quarter AND guided higher for Q2. TSM gapped up at the open, and then sold off throughout the day, ending down ~3%. If we were in a strong bull market, that wouldn't have happened.
Best To Your Week!
Charts provided courtesy of stockcharts.com.
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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