Weekend Stock Market Outlook

Stock Market Outlook For The Week of
October 28th = Downtrend

INDICATORS

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

COMMENTARY

The 200 day moving average was the latest support level to fall in what is a REALLY red October. The only good news seems to be that everyone thinks the markets are way oversold and should bounce from the current levels. But isn't the consensus usually wrong? Remember to follow your buy and sell rules, not the talking heads. When the selling is over, there will be great buying opportunities.

All the indexes continue to trade below their 20 and 50 day moving averages, keeping this signal in a downtrend.

2018-10-28 - US Stock Market Averages

Since prices continue to fall on higher than average volume, the price/volume signal remains in a downtrend too.

OEW also continues with a downtrend signal. They're also stating that we're very oversold, and expect a brief rally in the near term.

The S&P ($SPX) fell well below the 200 day moving average last week. The character of the US markets has shifted during October and from the chart you can clearly see the old adage in action; prices take the stairs on their way up and the elevator on their way down. More than likely we'll see a test of the April low price level within the next two weeks or so.

2018-10-28 - SPX Technical Analysis - Daily

Expanding the view, you can see that January 2016 was last time the SPX closed substantially below the 200 day / 40 week moving average. At some point, the lower stock prices will bring in big institutions...so watch for trading volume cues.

2018-10-28 - SPX Technical Analysis - Weekly

I took my own advice and checked my watch list. It wasn't pretty. But there are a few names that have held up well, relative to the overall market. And those names are the ones I'm watching closely for signs that the selling is complete.

Participate. Protect. Prepare.

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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 performed as a stand-alone, signal generator 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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3. Stock Market Outlook for 2018-10-28

Weekend Stock Market Outlook

Stock Market Outlook For The Week of
October 21st = Downtrend

INDICATORS

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

COMMENTARY

We start this week sitting on a small, fledgling recovery within a downtrend. The 200 day moving average provided some level of support, but it's not clear if this is the start of a rally or a pause in the downtrend.

All the indexes kick things off below their 20 and 50 day moving averages, keeping this signal in a downtrend.

2018-10-21 - US Stock Market Averages

The downtrend remains from a price/volume perspective, as leading stocks continue to get trounced and prices continue to fall on higher than average trading volume.

OEW remains in a downtrend. They expected a 250 point decline, followed by a 50% retracement, and then another decline to lower lows. Last week, we recovered just under 50% of the first drop (~110 of the 230 points).

The S&P ($SPX) found support at the 200 day moving average during the week, but didn't progress much from that level either. If that level doesn't hold, a trip below 2600 is likely (losses of another 6% or so).

2018-10-21 - SPX Technical Analysis - Daily

2018-10-21 - SPX Technical Analysis - Weekly

Now is not the time to go all in; we need some positive developments first. But take a look at your watch list and see what's holding up reasonable well in the midst of the sell-off. Those are likely the names that will lead the market higher when it turn around.

Participate. Protect. Prepare.

---

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 performed as a stand-alone, signal generator 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.

1. Invest-Safely.com
>>
2. Tracking the Stock Market
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3. Stock Market Outlook for 2018-10-21

Weekend Stock Market Outlook

Stock Market Outlook For The Week of
October 14th = Downtrend

INDICATORS

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

COMMENTARY

Ugly. Yes, we've grown accustom to low volatility. And yes, we've been seeing and discussing some potential warning signs of the past few weeks. But there's just no way around it...last weeks price drop was ugly. The only silver lining was Friday's price action, and even that wasn't enough to change the inevitable: this week sees a trend change from uptrend to downtrend.

All the indexes start the week below their 20 and 50 day moving averages, putting this signal in a downtrend. The Russell 2000 and NYSE are below their 200 day moving average as well (!), while he S&P, NASDAQ, and DJIA found some support at that level during Friday's trading session.

2018-10-14 - US Stock Market Averages

The big percentage sell-offs on high trading volume and weakness in leading stocks shifts the price/volume signal to a downtrend as well.

OEW puts us in a downtrend too. Per their analysis, the bull market that started in 2016 is over, and we're going to see our first bear market in some time.

We are now expecting a shallow 15% to 20% bear market lasting several months into next year.

The good news? Peak to trough, we've already seen ~8.5% (or 230 points) of that decline. Again, from OEW:

In recent years all the selloffs, (2011, 2015/2016, and 2018) have been quite similar...About a 250+ point decline, a 50% retracement, and then a lower low.

Technically speak, the S&P ($SPX) took out most of the near-term support levels last week; the 50 day moving average, the January high, and the lower trendline of the price channel. It's currently testing the 200 day moving average.

The S&P ($SPX) continued to retreat from the price upper channel, but appeared to find support on Friday, after testing key support levels (both the January high and 50-day moving average). If we continue lower this week, the next stop is the lower price channel. The ADX broke out, clearly showing the negative trend in firm command.

2018-10-14 - SPX Technical Analysis - Daily

Moving to the longer term view, the S&P broke the long term trendline that has acted as support all the way back into 2016. This development supports the OEW viewpoint about the end of our 2016 bull market.

2018-10-14 - SPX Technical Analysis - Weekly

Now we wait to see if the 200 day can provide support like it did in February and April. Usually a dramatic sell-off is followed by a decent rally...one could argue that started on Friday. And we're starting Q3 earnings season, which could bolster prices...as long as trade wars and tariffs aren't used to revise future earnings expectations downward.

Given the fast and furious selling, I'm expecting some additional price recovery in the near term, which I plan to use to my advantage before we head lower again...maybe back to the February low.

Participate. Protect. Prepare.

---

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 performed as a stand-alone, signal generator 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.

1. Invest-Safely.com
>>
2. Tracking the Stock Market
>>
3. Stock Market Outlook for 2018-10-14

Weekend Stock Market Outlook

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

INDICATORS

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

COMMENTARY

Well that didn't last long; the good times didn't even make it through the first week of October! The selloff on Thursday and Friday put a dent in our current rally. We're definitely seeing in the specialized indexes (Nasdaq for technology or the Russell2K for small caps). Two signal changes this week, but the overall market outlook remains in an uptrend for now. A shift to a downtrend signal from either price/volume or OEW would put 2/3 signals in the red and shift the market outlook from uptrend to downtrend. But the S&P is still within the April/May price channel and hasn't broken key support levels, so the uptrend isn't finished yet.

The Nasdaq followed the Russell 2000 lower, falling below it's 50-day moving average. The NYSE sits just below its own 50 day. The S&P500 sits between the 20 and the 50, having found some support at the latter. Only the Dow Jones is above it's 20 and 50. With 3 of the 5 market averages below their 20 and 50-day moving averages, the moving average signal changes to a downtrend.

2018-10-07 - US Stock Market Averages

From a price/volume perspective, we're no longer in an outright uptrend or downtrend. A few indexes are below their 50 days, and the distribution day count remains elevated. Specifically for the S&P, it's still above the 50-day, and distribution days are low. So this signal shifts from uptrend to mixed.

Continuing their theme from last week, OEW says we're in the last innings of an uptrend, expecting one last gasp to higher highs before a true correction takes hold.

The S&P ($SPX) continued to retreat from the price upper channel, but appeared to find support on Friday, after testing key support levels (both the January high and 50-day moving average). If we continue lower this week, the next stop is the lower price channel.

2018-10-07 - SPX Technical Analysis - Daily

The ADX continues to meander around under the "20" level. The DI- overtook the DI+ after the late week sell off, but still no definitive signal either way.

2018-10-07 - SPX Technical Analysis - Weekly

Longer term, we're going to see whether institutions think it's a good time to add to their positions, or if it's time to reallocate now that they're back to the January high.

Profit taking was the name of the game last week; hopefully you were able to do some of your own. Leading stocks got hammered across the board last week; some were sitting on comfortable gains, others recently broke out and weren't so lucky. Use the market outlook as a guide; right now it's telling us to be cautious. Let price be your guide, and don't forget to set stops and limit your losses if price action is weak.

---

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 performed as a stand-alone, signal generator 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.

1. Invest-Safely.com
>>
2. Tracking the Stock Market
>>
3. Stock Market Outlook for 2018-10-07