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Stock Market Outlook
For The Week Of April 9th = Downtrend


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


The stock market outlook maintains a downtrend designation, as we wait for confirmation from a second indicator.

The S&P500 ($SPX) fell 0.1% last week, and remains above the 50 and 200-day moving averages.

Technical analysis of daily SPX prices

2023-04-09-SPX Trendline Analysis - Daily

No change in the signals last week; bullish for the ADX and mixed for price/volume.  Trading volume was below average all week, with the index still needing a gain of 1.5% or more on above average trade volume to confirm an uptrend.  Unfortunately, we're past the 4-10 day window for a follow-through, which lowers the probability of a sustained uptrend.

Technical analysis of daily prices

2023-04-09- SPX Elliott Wave Analysis - Daily - Primary Y (Bearish)

Elliott Wave remains mixed. Both the bullish and bearish counts have the same Minutte wave structure in play.  It’s possible that the Minute (4) completed last week and now the SPX is in Minute (5).  That said, a 4th wave could go as low as 4002 (end of Minutte (1)).  Watch for a negative divergence in the RSI(5) to indicate completion of the fifth waves.

Technical analysis of daily prices

2023-04-09- SPX Elliott Wave Analysis - Daily - Primary 1 (Bullish)

In either case, expect chopping price action over the next couple of weeks, as the SPX moves between resistance (4150 – 4196) and support (4000).


Last week's release of ISM Manufacturing & Services shows signs of a slowing economy. The Manufacturing index decelerated from 47.7 (February) to 46.3 (March); the 5th straight contraction. The Services Index decelerated from 55.1 (February) to 51.2 (March). February job openings (JOLTS) declined slightly versus January (~5%), while Non-Farm Payrolls data indicates unemployment remained low in March (released Friday while U.S. markets were closed).

This week markets the start of earnings season, with big banks providing us the first glimpse of life after the collapse of Signature Bank.  The latest round of CPI data is released on Wednesday, with PPI following shortly thereafter on Thursday.  Friday is the fire-hose, with retail sales and import/export prices coming out pre-market, along with earnings reports from JPMorgan Chase ($JPM), Wells Fargo ($WFC), Blackrock ($BLK), and Citigroup ($C).


Best To Your Week!

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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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