Headwinds remain (Stalled stimulus talks in the U.S. and a no-deal Brexit in the E.U.), and the overall stock market remains very over-valued.
But none of that has stopped the markets as they march higher, so keep working your plan and raise your stops to protect your profits.
More commentary after the jump... Stock Market Outlook - Week of December 06 2020
November was a great month for the stock markets, with the S&P gaining 13%, and December is usually a good month for stocks...I'm sure everyone is looking forward to a Santa Claus rally!
Also some great articles on the economy from Steve Blumenthal and John Mauldin this week on debt, interest rates, and the challenges we face going forward; definitely worth your time.
More commentary after the jump... Stock Market Outlook - Week of December 06 2020
The S&P remains extended from the 200-day moving average and there are signs the rally has weakened a bit (RSI/MACD).
Even though the signals are still green, there’s more downside risk than upside potential at this point. That doesn’t mean the S&P couldn’t go higher before another sell-off, only that now is a good time to take profits!
More commentary after the jump... Stock Market Outlook - Week of November 29 2020
The S&P found support near the 13-day moving average, but is still extended from the 200-day (~12% which is high historically).
Sector rotation is in full swing as investors digest the pandemic's growing second wave and positive vaccine news from Moderna and Pfizer.
Stocks that have lead the market higher may be dominating your portfolio, whether you hold them outright or as part of an index fund (e.g. Amazon, Target, Google, etc.). Take a moment to review your holdings and make sure you have the best companies across a wide variety of sectors.
More commentary after the jump... Stock Market Outlook - Week of November 22 2020
Positive news on the COVID vaccine front supported U.S. stocks last week, but the S&P also sits ~12% above the 200-day moving average, which typically means we're in for another correction.
More commentary after the jump...Stock Market Outlook - Week of November 15 2020
Markets typically perform well when there is gridlock in the U.S. government (which we appear to have), a positive for equities longer term.
But the next few months are less certain, as recounts are almost a given in states with close races, and the current administration is launching multiple lawsuits to investigate vote counting processes.
More commentary after the jump... Stock Market Outlook - Week of November 08 2020
The ADX continue to worsen last week, price & volume accelerated through the 50-day moving average, and the bearish OEW count found new life.
U.S. elections are Tuesday, and it's really anyone's guess as to how it will turn out, both from a Presidential as well as a Congressional standpoint.
More commentary after the jump... Stock Market Outlook - Week of November 01 2020
There are many potential market moving balls in the air right now, and we won't know have prices will react. Prepare yourself and your holdings for some volatility, watch how leading stocks react, and cut your losses when they reach 7%.
More commentary after the jump... Stock Market Outlook - Week of October 25 2020
Stimulus remains the driving force behind the U.S. markets; don't fight it!
More commentary after the jump... Stock Market Outlook - Week of October 18 2020
Stimulus remains the driving force behind the U.S. markets; don't fight it!
More commentary after the jump... Stock Market Outlook - Week of October 11 2020
We didn't have to wait long for an October surprise; the U.S. president tested positive for COVID-19. Then again, there are a lot of people that don't think that is surprising. The Presidents health will dominate the news cycle this week; at a minimum, expect higher volatility.
More commentary after the jump... Stock Market Outlook - Week of October 04 2020
If the bearish trend holds, prices should retreat early this week. On the bullish side, look for a large advanced on high trading volume as a signal that a new rally is taking shape.
More commentary after the jump... Stock Market Outlook - Week of September 27 2020
The price/volume signal joined the ADX in bearish territory, while Elliott Wave isn't too far away from a switch either.
When planning your trades, keep in mind that September isn't great for stocks historically, and we typically see a sell off during the second half of the month.
More commentary after the jump... Stock Market Outlook - Week of September 20 2020
It remains to be seen if all the damage is done, or if there’s more to come. Throughout the uptrend, sell-offs have been over quickly, but September isn’t a good month for stocks.
Be sure to check out the fascinating perspective from Brent Donnelly at HSBC, showing the similarities between today's environment and 1968.
More commentary after the jump... Stock Market Outlook - Week of September 13 2020
Price and volume action remains bullish. Elliott Wave counts will work themselves out soon; last week's sell off could be the end of the 3rd wave or the 5th wave.
With prices near all time highs, an ADX cross-over, and a "mature" uptrend in Elliott Wave, it's time to review your positions (sizing and performance). Play with house money (aka your profits) where you can, cut your losses where you can't.
More commentary after the jump... Stock Market Outlook - Week of September 06 2020
The ADX and price/volume action show a strong bullish trend in place. The "correct" Elliott Wave count isn't clear (to me at least), but at least it hasn't turned bearish yet.
In case you missed it, the Fed held their annual meeting in Jackson Hole, and touched on a pretty major change in the way inflation will be viewed in the years ahead.
Near term, that probably won't change much. Long term, there are pretty big implications for investing and personal finance.
More commentary after the jump... Stock Market Outlook - Week of August 30 2020
The S&P500 sits at all time highs, but is extended from support (historically speaking) and represents a critical price level of Elliott Wave analysis.
I honestly don’t know which EW count is correct...and most likely no one will until after we see the depth of the next correction.
What we do know is that the current rally has been really kind to tech stocks and other COVID plays. Your allocations may be a little out of whack, so it’s probably a good time to take some profits.
More commentary after the jump... Stock Market Outlook - Week of August 23 2020
The S&P500 is just shy of an all time high, but we're in a historically "weak" period for market prices, so it wouldn't be surprising to see a pull back over the next 2-3 weeks.
More commentary after the jump... Stock Market Outlook - Week of August 16 2020
The Elliott Wave count, if correct, shows a correction should start any day now, since the Minor 5 wave needs to end before it exceeds the February high (3393).
Of course, the count could be wrong, which is why I don’t use just one signal. Downside risk is roughly 6%; that’s how far the S&P500 would need to fall before breaking the 50-day moving average and generating a sell signal in the other indicators.
More commentary after the jump... Stock Market Outlook - Week of August 09 2020
More commentary after the jump...Stock Market Outlook - Week of August 02 2020
Even with an uptrend in place, now is not the time to get complacent. Your favorite stock might be one conference call away from a major selloff; just ask Intel shareholders!
More commentary after the jump...Stock Market Outlook - Week of July 26 2020
The S&P500 closed above the resistance trendline, with a bullish ADX and price/volume count. And Elliott Wave count still shows a 5th wave in progress.
More commentary after the jump...Stock Market Outlook - Week of July 19 2020
The ADX remains bullish and distribution days are spread out. Elliott Wave still shows a 5th wave looking to get past the June 8th high.
More commentary after the jump...Stock Market Outlook - Week of July 12 2020
The ADX Directional indicators cross-over again, price / volume remains well behaved, and no change in the Elliott Wave count.
With Q2 in the books, it's a great time to take stock of your personal financial situation and goals for the year. The first half of 2020 was a wild ride and everyone's finances were impacted in some way.
More commentary after the jump...Stock Market Outlook - Week of July 05 2020
The ADX crossed over into bearish territory. Price/volme and Elliott Wave remain in updates, but need support immediately. Can the 50 or 200-day moving average provide it?
More commentary after the jump...Stock Market Outlook - Week of June 28 2020
The S&P briefly dipped below the upward trendline on Monday, while the ADX "weakly" crossed-over into bullish territory.
Price ran into resistance around the 85.4% retracement level, kicking of discussions about the current count, the lack of divergence in the RSI/MACD, etc.
Watch the June 8th high and the the June 15th low for potential signal changes.
More commentary after the jump...Stock Market Outlook - Week of June 21 2020
The S&P500 found support at the 200-day moving average, and the upward trendline between the April and May lows remains intact, but the ADX Directional indicators cross-over, switching to a sell signal. For the Elliott Wave, we're left with a higher probability that the S&P is still in an Intermediate A-wave (the 4th wave to be specific).
Hertz...even the company is saying it's stock will ultimately be worthless! Bear that in mind if you decide to TRADE it.
More commentary after the jump...Stock Market Outlook - Week of June 07 2020
Stocks were on fire last week. The bullish trend shown by the ADX is strengthening. Price/volume action remains positive, with no sign of heavy selling recently.
The market made also swift work of last week's update to Elliott Wave, blasting past 3041 and invalidating the count I was showing. If we get back to 3393, then we'll have to re-evaluate the Feb-Mar decline as well.
It's hard to believe, but the SP500 is just about even for the year!
More commentary after the jump...Stock Market Outlook - Week of June 07 2020
The S&P500 spent last week recovering from the prior week's sell-off. No real change in the ADX or price/volume story, while price is challenging the 61.8% level retracement level again.
The disconnect between Main Street and Wall Street seems to grow each day, with job/income losses in stark contrast with rising stock prices and shareholder value.
Let prices be your guide and respond accordingly.
More commentary after the jump...Stock Market Outlook - Week of May 10 2020
Earnings season is in full swing, with many big names reporting this week. Expect price volatility and limited forward guidance. The best you can do is look for companies with strong balance sheets and high demand for their products in a "stay at home" economy.
More commentary after the jump...Stock Market Outlook - Week of May 03 2020
Earnings season is in full swing, with many big names reporting this week. Expect price volatility and limited forward guidance. The best you can do is look for companies with strong balance sheets and high demand for their products in a "stay at home" economy.
More commentary after the jump...Stock Market Outlook - Week of April 26 2020
The S&P500 sits just above the 50-day moving average, and the current rally only has two distribution days. But take note of the negative divergence between the relative strength (RSI) and price over the past few days. Price targets for ending the current rally / c-wave are still in play: 2897, 2919, and 3175.
More commentary after the jump...Stock Market Outlook - Week of April 19 2020
The S&P500 has retraced 50% of the correction, and is in the final leg of the current rally, per Elliott Wave. There are several price targets for the end of the current wave between 2800 and 2950.
We saw some positive signs, with regard to infection curves, but ~10% of the U.S. workforce has applied for unemployment over the last 3 weeks. So it'll take time for consumer spending habits to recover.
Banks kick off Q1 earnings season this week. Keep an eye on forecasts for the year, or lack thereof.
More commentary after the jump...Stock Market Outlook - Week of April 12 2020
The S&P500 ($SPX) sits well below it's moving averages (~19 and 21% below the 50 and 200 day, respectively).
Prices retreated from the current downward trendline, but may have found support for a new uptrend at the 2450 level. One of those trendlines will be violated soon, as both are really steep and daily price moves are still big.
According to most Elliott wave counts, the SPX is experiencing a short-term rally in a longer-term downtrend; meaning 2191 isn't the bottom. That said, we could rally to 2934 before heading back down! More commentary after the jump...Stock Market Outlook - Week of April 05 2020
The S&P500 sits ~16% below the 50 and 200 day moving average. The index started a potential rally on Tuesday, so watch for a follow-through this week. Be cautious though, as the first rally after an extreme sell-off usually fails.
From an economic standpoint, last week was extraordinary and U.S. stocks saw their best week in 11 years. Before we get carried away, we're about 25% below the February peak, and stock prices are basically "even" from a valuation perspective.
Hats off and a big thank you to the brave men and women putting their health at risk in essential positions to keep the rest of us safe and healthy during this crisis.
More commentary after the jump...Stock Market Outlook - Week of March 29 2020
The S&P has retraced all the gains from 2019. There are some former lows near 2100 and 2000 that could provide support. Otherwise, the 2016 low at 1810 is next major level.
While I personally don't think the selling is over just yet, there is and will be opportunity to purchase great companies at a discount soon.
The news will sound dire, social media will be worse, so practice social distancing from those things too.
For those of you working in our hospitals, urgent care centers, doctor's offices, thank you.
For those of you working in our grocery stores, restaurants, and food supply chains, thank you.
More commentary after the jump...Stock Market Outlook - Week of March 08 2020
The S&P500 ($SPX) shows massive price movement and high trading volumes. The volatility reminds me of the late 2000s, but it's definitely not the same. 9% price moves are just crazy, not to mention a week straight of 5% or greater moves...in an index of 500 companies!
And as if we needed more black swans flying around, OPEC and Russia decided to enter a price war over oil.
More commentary after the jump...Stock Market Outlook - Week of March 08 2020
The S&P tried to retake the 200-day moving average last week, ending two trading days above that level. In each case, selling returned and forced prices lower. Looking that the new OEW labeling, this phase of the downtrend could find support 2790-2750, give or take.
While volatility in the stock market is expected, it's the volatility in the bond market that has some investors spooked. If you have any bond funds, they've probably done quite well this year and will likely continue to do so until the crisis subsides.
More commentary after the jump...Stock Market Outlook - Week of March 08 2020
The S&P currently sits below the 200-day moving average, and broke all the trendlines we had been following. Price appears to have found support at the October low. That's a 100% retracement of the 2019 Q4 advanced, meaning the market gave back all that it gained since October of last year.
Don't panic; prepare. Jim Cramer likened the current situation (healthcare-wise) to the time before measles had a vaccine. I think that's a good comparison. They'll be some bumps along the way, but we'll get through it.
More commentary after the jump...Stock Market Outlook - Week of March 01 2020
Watch for more high volume selling this week, especially if the 50-day moving average doesn't hold.
More commentary after the jump...Stock Market Outlook - Week of Week of February 23 2020
The index currently sits 3.8% above the 50-day moving average and 11.5% above the 200-day.
More commentary after the jump...Stock Market Outlook - Week of Week of February 16 2020
More commentary after the jump...Stock Market Outlook - Week of Week of February 09 2020
While the pandemic was unexpected, the reaction by financial markets wasn't. Uncertainty creates a fear of losing money, which drives investors to reduce their risk of loss.
What can you do? Adjust.
Charts and more commentary after the jump...Stock Market Outlook - Week of Week of February 02 2020
With such a great year in the books, I expected to see some money left on the table, so to speak. It’s the “cost” of avoiding really bad downtrends. So how did we do?
Chart-wise, the S&P continues to plod along within the price channel we've been following, but remains extended from moving averages (3% above the 50-day, and ~10% above the 200-day).
Per Factset, about 30% of the S&P 500 will report earnings this week. Hopefully you get an Intel (INTC), and not a Discover Financial (DFS)!
Charts and more commentary after the jump...Stock Market Outlook - Week of Week of January 26 2020
Another week, another deluge of headlines. Earnings season, U.S.-China Phase 1 trade deal, North American trade agreement, impeachment, etc., etc., etc.
Don't forget that all U.S. markets are closed on Monday in observance of Martin Luther King, Jr. Day.
Charts and more commentary after the jump...Stock Market Outlook - Week of Week of January 19 2020
The market shook off a flurry of potentially market moving headlines last week, and experts see little risk of recession in 2020...even the yield curve data seems to back this up.
Seems like there's a lot of complacency right now, no?
More commentary after the jump...Stock Market Outlook - Week of Week of January 12 2020
The stock market outlook kicks off the new year and decade off in an uptrend. The ADX directional indicators are bullish, price/volume is bullish, and OEW was/is bullish.
More commentary after the jump...Stock Market Outlook - Week of January 05 2020
