Sunday, January 28, 2018

Weekend Stock Market Outlook

Stock Market Outlook For The Week of
January 28th = Uptrend

INDICATORS

20/50 Day Moving Averages: Uptrend
Price & Volume Action: Uptrend
Objective Elliott Wave Analysis: Uptrend

COMMENTARY

U.S. markets rumbled higher last week, extending our uptrend. The government shutdown ended quickly, though we may see another one in a few week because the solution is temporary.

All the market indexes remain above their 20 and 50 day moving averages.

$INDU,$NYA,$SPX,$USD,$COMPQ,$CRB,$RUT,$GOLD

2018-01-28-US Stock Market Averages

Price and volume action is positive for the markets. For individual stocks, lower volume breakouts remain an issue. In fact, several growth stocks on my watch list have sold off heavily since they broke out (on low volume). Remember to keep those losses in check, even if the market is in an uptrend.

OEW is still in place. Whenever we get our next correction, OEW expects it to be small.

ANALYSIS

While back-testing for my yearly performance review, I noticed the S&P500 sits ~14% above it's 200-day moving average as of last week's close. That seemed high, and I wondered how often this happened (and more importantly, what happens next!).

In the past 20 years, S&P prices exceeded the 200 day moving average by 15% or more a total of 4 times:

  1. April 1998
  2. April 1999
  3. August 2009
  4. Feb 2011
The biggest difference was ~+21%, set back on 10/15/2009. On the downsides, within 5-9 months of first exceeding the 15% threshold, prices fell back below the 200 day moving average.

That's not the say we won't go higher, just that downside risk is larger than upside potential at this point (~7% from the largest difference in the past 20 years, vs 14% from a key support level).


If you find this research helpful, please tell a friend. If you don't find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has tracked the market using past performance estimates:

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro. Charts provided courtesy of stockcharts.com.




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Sunday, January 21, 2018

Weekend Stock Market Outlook

Stock Market Outlook For The Week of
January 21st = Uptrend

INDICATORS

20/50 Day Moving Averages: Uptrend
Price & Volume Action: Uptrend
Objective Elliott Wave Analysis: Uptrend

COMMENTARY

U.S. markets continue their winning ways, as the uptrend moves into the 4th week of trading in 2018. Every week, it seems like there is a new crisis for the market to overcome. This week we're dealing a government shutdown, as members of the U.S. legislator could not come to terms on a funding bill. For reference, the last time we had a shutdown was back in October 2013. The markets dropped a little less than 5%, and then immediately recovered. Buy the dip indeed.

All the market indexes remain above their 20 and 50 day moving averages. We have to go all the way back to late August to see the last time the S&P500 was near its 50-day moving average! Now that's a rally.

$INDU,$NYA,$SPX,$USD,$COMPQ,$CRB,$RUT,$GOLD

2018-01-21-US Stock Market Averages

Price and volume action remains positive, though few of the recent breakouts had the trading volume needed to instill confidence. Unfortunately, that's usually the case with later stage bases. All the more reason to make sure you use well defined sell rules.

OEW uptrend remains in place.

Back in 2016, Tony's target for this uptrend (using the S&P500) was 3,000 to 3,600. At that time, the S&P was trading around 2,100. I was skeptical...that was a ~50% move to the upside, and I was expecting a major correction. Now that we're less than 10% from the lower end of that target, it's looking like one hell of a call!

But that's why I use an investing process and money management. In this case, I made money even though I was wrong!


If you find this research helpful, please tell a friend. If you don't find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has tracked the market using past performance estimates:

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro. Charts provided courtesy of stockcharts.com.




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Sunday, January 14, 2018

Weekend Stock Market Outlook

Stock Market Outlook For The Week of
January 14th = Uptrend

INDICATORS

20/50 Day Moving Averages: Uptrend
Price & Volume Action: Uptrend
Objective Elliott Wave Analysis: Uptrend

COMMENTARY

U.S. markets continue their uptrend into the third week of 2018.

All the market indexes remain above their 20 and 50 day moving averages.

$INDU,$NYA,$SPX,$USD,$COMPQ,$CRB,$RUT,$GOLD

2018-01-14-US Stock Market Averages

Price and volume action remains positive, so the uptrend signal remains in place. A few stocks even broke out of 6-week bases last week! On the downside, several leaders are in late stage bases (i.e. their trying to breakout successfully for the 3rd or 4th time).

Tony returns after a few week hiatus, and the OEW uptrend remains in place.

I received a few emails last week, wondering why I was so down on investing in stocks given that we are in an uptrend. Quite the opposite, I'm really positive on stocks; it's just hard to find stocks that meet my growth investing or income investing criteria.

My concern was the typical investor reaction to scarcity. When investing opportunities are in short supply, investors tend to get impatient, and "adjust" their criteria (increasing the risk of loss) so that there are more opportunities, rather than waiting patiently for conditions to improve.


If you find this research helpful, please tell a friend. If you don't find it helpful, tell an enemy. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has tracked the market using past performance estimates:

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro. Charts provided courtesy of stockcharts.com.




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Sunday, January 7, 2018

Weekend Stock Market Outlook

Stock Market Outlook For The Week of
January 7th = Uptrend

INDICATORS

20/50 Day Moving Averages: Uptrend
Price & Volume Action: Uptrend
Objective Elliott Wave Analysis: Uptrend

COMMENTARY

U.S. markets had a great start to the new year, and continue their uptrend into the second week of 2018.

All the market indexes remain above their 20 and 50 day moving averages.

$INDU,$NYA,$SPX,$USD,$COMPQ,$CRB,$RUT,$GOLD

2018-01-07-US Stock Market Averages

No change in the price and volume action, which still indicates an uptrend. A few stocks continue to work through short bases, but overall, proper set-ups for growth stocks are hard to find and and income stocks remain overvalued.

Tony hopes to be back soon. In the meantime, he's updated a few charts, and OEW remains in an uptrend.

Believe it or not, this is a difficult time to be an investor. With most stocks on the rise, it can be hard to stick to rule based investing. Many stocks sit on your watch list and don't meet your criteria, and then you watch the price continue to rise regardless. So investors take more risks because they fear missing out; risks like increasing position size, buying without proper bases, overlooking poor fundamentals, taking out a mortgage to buy bitcoin, etc.

Stay the course. Your rules are meant to protect your money...it's "safe" investing after all. To that end, when risks are higher, I decrease my planned position sizes to compensate (by lowering the amount of risk per trade). Once we have a proper correction, I expect to see some good entry conditions, at which point I'll consider readjusting my position sizes.


If you find this research helpful, please tell a friend. I share articles and other news of interest via Twitter; you can follow me @investsafely. The weekly market outlook is also posted on Facebook and Linkedin.

You can check out how well (or poorly) the outlook has tracked the market using past performance estimates:

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro. Charts provided courtesy of stockcharts.com.




Return from Stock Market Outlook 2018-01-07 to Tracking the Stock Market

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