Weekend Stock Market Outlook

Stock Market Outlook For The Week of
April 29th = Downtrend

INDICATORS

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

COMMENTARY

Market prices didn't make much progress last week, so the environment remains bearish for new positions (i.e. downtrend).

Only the Russell 2000 is above the 50-day moving average.

Price charts for $SPX,$COMPQ,$INDU,$NYA,$RUT,$VIX,$TNX,$USD,$CRB,$GOLD

2018-04-29-US Stock Market Averages

Price and volume action remains mixed. Growth stocks are having a hard time staying above technical resistance levels (i.e. buy points in price patterns such as flat bases), even though Q1 earnings have been strong.

OEW continues to show a medium term downtrend. The long-term bull market remains in place, with the following caveat:

    We see no reason to be concerned unless the SPX loses 2500.

Coincidentally, that's a handful of points below the floor of the descending triangle pattern we've been tracking recently. The upper trendline now rests at ~2,680; the floor remains at 2,581. The ADX indicator hasn't changed much in April (still bearish), as the S&P works its way through the descending triangle price pattern.

2018-04-29 - $SPX Technical Analysis

2018-04-29 - SPX Technical Analysis

The longer term price channel also remains intact, as we saw a bounce off the lower trendline last week. But the week ended with a loss, and trading volumes were higher than last week.

2018-04-29 - $SPX Technical Analysis

2018-04-29 - SPX Technical Analysis

Earnings reports, for the most part, are crushing expectations. You'd think stock prices would react in kind, blasting past resistance levels and other technical sticking points. You'd be wrong. Lot's of after hours/pre-market gap ups, only to be sold off during the trading day.

For example, Caterpillar (CAT) jumped ~5% after a massive earnings beat, only reverse course during Tuesday trading to close with a 6% loss! Even technology names weren't immune. Amazon (AMZN) and Intel (INTC) rose 7% and 8% in after-hours trading, respectively, after releasing strong quarterly results. The next day, Amazon shed some of that gain, closing up ~4%, while Intel ended with 0.6% loss! Not exactly a sign of institutional support...

Such is life in a downtrend...which is why it pays to be cautious and avoid initiating new positions until market conditions improve.



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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.