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Stock Market Outlook
For The Week Of February 12th = Uptrend


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


The stock market outlook continues in an uptrend, while looking for technical and economic support this week.

The S&P500 ($SPX) fell 1.1% last week.  The 4080 level provided a key support and resistance battleground for closing prices, going all the way back to August of 2022.  After breaking above that level early this month, the index now needs its support.  A corresponding increase in SPX volatility has the $VIX testing resistance at its 50-day moving average as well.

Technical analysis of daily SPX prices

2023-02-12-SPX Trendline Analysis - Daily

The ADX and price/volume action remains bullish despite last week's losses.

The Elliott Wave signal remains mixed, with 3 small waves clearly visible (Minutte or Subminutte).  A bearish MACD cross-over suggests further downside ahead, but less than a point of overlap isn't enough to confirm anything.

Technical analysis of daily prices

2023-02-12- SPX Elliott Wave Analysis - Daily - Primary Y

Key levels remain 3765 and 4325, although a move above 4195 requires another relabeling of the bearish count.


Powell's Tuesday speech generated a bit of intraday volatility, but otherwise 0DTE options trading and earnings announcements pushed prices around.  Even within a given sector, earnings continue to be a mixed bag.  Some firms outperform ($UBER), others not so much ($LYFT).

Looking ahead to this week, on Tuesday at 8:30am, Cupid delivers the January CPI report.  If data comes in higher than estimates, equities probably head lower as the market reprices the possibility of a higher rate hike at the next Fed meeting (0.5% instead of 0.25%), and begins accepting there won't be any rate cuts this year.  If data is lower than expected, equities ramp higher as markets price in a pause in rate hikes at the next meeting.

For what it's worth, treasury yields (particularly the 3 month & 2 year) spiked last week, indicating that someone is betting on higher for longer.

And last but not least, another round of earnings followed by monthly options expiration on Friday.

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, Federal Reserve Bank of St. Louis, Hedgeye, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

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