Weekend Stock Market Outlook

Stock Market Outlook For The Week of
February 25th = Uptrend

INDICATORS

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

COMMENTARY

We start the week in uptrend territory, but to took Friday's close to get us there. The shortened trading week was accompanied by lower trading volumes; a reprieve from the heavy volumes we saw two weeks ago. Unfortunately, Friday's rally occurred with really low trading volume.

Thanks to Friday's surge, all the indexes start the week at or above their 50-day moving averages.

2018-02-25-US Stock Market Averages

Price and volume action stays in an uptrend. High quality growth stock continue to work their way back to proper buy points. Income stocks remain expensive based on historical price-earnings ratios.

OEW continues to see an uptrend.

Most of the markets leading growth stocks (e.g. chip makers, 'FANG' stocks) have rallied for over a year and are now in late-stage (i.e. their 3rd or 4th) bases. I wouldn't be surprised to see some sector rotation as institutions look for new growth opportunity...maybe biomeds, as they sold off heavily during the same timeframe, regardless of financial performance.

In other news, Berkshire Hathaway released an annual report for 2017. It's required reading, regardless of whether you consider yourself a "value" investor.

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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:

• 2015 Performance - Stock Market Outlook
• 2016 Performance - Stock Market Outlook
• 2017 Performance - Stock Market Outlook

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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Weekend Stock Market Outlook

Stock Market Outlook For The Week of
February 18th = Uptrend

INDICATORS

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

COMMENTARY

Well, that was quick. A 12% decline in 2 weeks, and now it's back to "normal". The 200 day moving average held, and now stock prices sit at levels where the whole sell-off started. Usually, prices will retest the lows at least once before rallying, but performance has been anything but typically over the past year and a half.

Market averages recovered significantly, with a majority of indexes trading at their 50-day moving averages. The Nasdaq managed to rise above its 20 day moving average, and the Russell 2000 sit just below both.

2018-02-18-US Stock Market Averages

Price and volume action indicates a new uptrend is underway. Prices appear to have bottomed on March 9th, and then confirmed a new direction on the 14th by rising on higher than average volume.

OEW also switched back to an uptrend. Tony created a "weekly rate of change" indicator that gave a buy signal last week; the signal has been 96% accurate over the past 50 years worth of S&P data.

Growth stocks are an area to watch over the next few weeks. Very few leading stocks are offering good entry points; the best stocks (fundamentally) are still a few weeks away from proper set-ups (technically). In this case, market conditions are suitable for new investments, but individual stocks are still working their way back.

Even with the sharp sell off, income stocks remain expensive. As an example, the P/E ratios for most "dividend kings" are still way above 20. As Warren Buffett would say, the hamburgers are still really expensive.

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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:

• 2015 Performance - Stock Market Outlook
• 2016 Performance - Stock Market Outlook
• 2017 Performance - Stock Market Outlook

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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Weekend Stock Market Outlook

Stock Market Outlook For The Week of
February 11th = Downtrend

INDICATORS

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

COMMENTARY

By now, you know that stocks sold off hard across the globe. Price movements have been big, with intra-day price swings covering months of price movement (and that doesn't include pre/post market trading). And they've been swift, sometimes measured in a matter of minutes.

All the market indexes are below their 20-day and 50-day moving averages. Several found support at their 200-day. Given the nature of the sell-off (big and fast), the 50 day won't be a good indicator to catch the start of the next uptrend.

2018-02-11-US Stock Market Averages

Price and volume action indicates a correction. The growth stocks on my watch list have been weak for weeks, so most of my holdings had already been shown the door ahead of the sell-off. Income stocks got hammered as well, so it may be time to check their valuations and see if you can pick some up on the cheap.

OEW switched to a downtrend. They had some good news, with an expectation that we'll reach new highs again once this downtrend bottoms.

In the past few years, exchange traded funds and notes (ETFs / ETNs) have been created to calculate price based on volatility; both on the long side and the short side. Those instruments had HUGE price movements in a short amount of time. Those that were betting against rising volatility lost 90-95% of their value. At that level of loss, the fund is usually forced to liquidate. In order to liquidate, the funds managers had to raise capital, which required them to sell other instruments that still had value, namely stocks, sending prices down even more.

We didn't need much downside movement to change the market outlook, so now our attention turns to finding the start of the next uptrend. There are some that think this will be a V-shaped correction, and stock prices will recover as quickly as they've sold off. They argue that corporate earnings are still robust, so the underlying fundamentals (revenues, profits, etc.) still justify higher prices. I haven't seen much commentary on the other side (that this is the start of a new bear market).

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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:

• 2015 Performance - Stock Market Outlook
• 2016 Performance - Stock Market Outlook

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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Return from Stock Market Outlook 2018-02-11 to Tracking the Stock Market

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Weekend Stock Market Outlook

Stock Market Outlook For The Week of
February 4th = Uptrend

INDICATORS

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

COMMENTARY

The start to February trading was not as kind as January. Last week's commentary on downside risk was very timely, as prices in the US markets were at the mercy of sellers all week. Pundits blamed bonds. Volatility returned with a vengeance on Friday. The overall uptrend remains in place, but I wouldn't be surprised to see a switch next week. It won't take much selling to put the indexes below their 50-day moving averages.

All the market indexes fell below their 20-day moving averages for the first time in months. The Russell 2000 closed slightly below it's 50, with the others are about halfway to that level.

2018-02-04-US Stock Market Averages

Price and volume action weakened substantially. Last week was terrible for the growth stocks on my watch list; they got pummeled and had their fair share of gap downs in afterhours trading. Not the price action you see in a strong market setting.

OEW indicates a downtrend may be underway, but still expects it to be small (5% or so, which would mean that we're more than halfway there already).

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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:

• 2015 Performance - Stock Market Outlook
• 2016 Performance - Stock Market Outlook

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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Return from Stock Market Outlook 2018-02-04 to Tracking the Stock Market

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