The S&P500 ($SPX) gained 0.8% last week. As of Friday's close, the index was ~1% below the 50-day moving average, and ~6% above the 200 day moving average.
2023-08-27-SPX Trendline Analysis - Daily
The ADX directional indicators and price/volume stay bearish this week, after the index ran into resistance at the 50-day moving average Thursday. Trading volumes declined for most of August, coinciding with the summer holiday season in the U.S. and Europe.
Price/volume also shifted to a downtrend on Wednesday, after failing to find support at the 50-day moving average on Tuesday and picking up a few distribution days along the way.
Elliott Wave remains mixed. There's a completed wave as of August 18, but the wave structure is difficult to see.
2023-08-27 - SPX Elliott Wave Analysis - Daily - Primary Y (Bearish)
At first glance, a 5-wave pattern can been seen, suggesting more downside ahead. The bullish count could show 3 waves down, retracing 50% of Minor 3 to complete Minor 4. Short-term support is now 4335, while the key resistance level remains 4607.
2023-08-27 - SPX Elliott Wave Analysis - Daily - Primary 1 (Bullish)
Fed Chair Powell's Jackson Hole speech was a bit longer than last year's, but the message was similar: inflation remains above target and more "work" is needed. He conceded that inflation is heading in the right direction, but the FOMC is prepared to hold and/or raise rates further if appropriate.
Last week's undercard was a non-event: the BRICs summit didn't deliver any news of a new currency this time around. So much for "word on the street".
This week's important economic data includes JOLTS on Tuesday, the second revision of Q2 GDP on Wednesday, July PCE on Thursday, and Non-Farm Payrolls on Friday.
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
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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