2022-09-04-SPX Trendline Analysis - Daily
In terms of short-term trendlines, an uptrend drawn through closing prices broke last Tuesday, while a trendline through daily lows remains intact.
Also on Tuesday, price & volume joined the ADX in signaling a downtrend, after the SPX sliced through the 50-day moving average on increased trading volume.
2022-09-04- SPX Elliott Wave Analysis - Daily - Primary X
Elliott Wave also flipped to a downtrend when index closed below the June 28 intraday high of 3,946, causing Wave 4 to overlap Wave 1.
Since touching the 200-day moving average 3 weeks ago, the SPX corrected ~10%! I know I wrote about downside risk and choppy price action, but that was a bit more than I expected.
Recent price action is a good reminder that anything's possible. Some back and forth whipsawing wouldn't surprise me one bit with Wall Street returning to the trading desks.
A few economic data points came out last week. All of them are backward looking, but could support a view that the U.S. economy hasn't been impacted by recent rate hikes and can therefore handle more.
The Job Openings and Labor Turnover Summary or JOLTS for July was essentially unchanged from June. The August ISM data for manufacturing PMI remained the same as July with a reading of 52.8 (>50 indicates expansion in manufacturing activity). And total nonfarm payroll employment showed a 0.2% increase in unemployment, up to 3.7%.
U.S. markets are closed Monday (today) for Labor Day.
Best To Your Week!
P.S. If you find this research helpful, please tell a friend. If you don't, tell an enemy.
Sources: Bloomberg, CNBC, Hedgeye, U.S. Bureau of Labor Statistics
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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