Weekend Stock Market Outlook

Stock Market Outlook For The Week of
October 20th = Uptrend

INDICATORS

ADX Directional Indicators: Uptrend
Price & Volume Action: Mixed
Objective Elliott Wave Analysis: Uptrend

COMMENTARY

The stock market outlook heads into this week in an uptrend thanks to changes in the ADX and OEW.

The ADX Directional indicators crossed early last week. Price and volume remains mixed, with the S&P trading above its 50-day moving average, but distribution days at 8...that's a lot of selling. OEW also switched back to an uptrend last Monday.

Technical analysis of daily SPX prices

2019-10-20 - SPX Trendline Analysis - Daily

The S&P bounced of the resistance trendline on Friday, so the bullish pennant pattern remains in play.

Technical analysis of weekly SPX prices

2019-10-20 - SPX Trendline Analysis - Weekly

There's no shortage of potential, market moving events in the near future. Earnings reports will come in hot and heavy over the next two weeks. Weaker forecasts are easier to beat, but missing lower expectations is usually worse for stock price.

The phased approach will given everyone involved to kick the can down the road if they don't like the "current" phase. Can't agree on IP protections, that's the next phase. Trump even said that writing Phase 1 could take up to 5 weeks! The hope is that an agreement would be signed at the Asia Pacific Economic Cooperation on Nov. 16.

We'll likely see the U.S. Fed cut interest rates another quarter point before the end of the month. You'd be forgiven for thinking that this might be positive for market prices, as the yield from owning an index fund is higher than the interest rate you can get in a money market or savings account. The risk of loss is higher, but some investors (pension funds, etc.) don't have much choice.

Trade deals will continue to garner a lot of attention, whether it's Brexit drama or the U.S./China "agreement". Then there's the geopolitical issues resulting from the U.S. withdrawal in Syria, the ongoing impeachment inquiry of U.S. President Trump, and even the democratic presidential debates for the 2020 election.

We've seen quite a bit of sector rotation (in terms of what's hot), with construction, retail and real estate leading the market higher. Those aren't exactly the sectors of massive rallies, but at least there's something leading prices higher. Pick your spots!

Best to your week!


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Charts provided courtesy of stockcharts.com.

If you're interested in learning more about the relationship between price and volume, or how to find and trade the best stocks for your growth strategy, check out this book on Amazon via the following affiliate link: How to Make Money in Stocks: A Winning System in Good Times and Bad. It's one of my favorites.

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro.

Once a year, I review the market outlook signals as if they were a mechanical trading system, while pointing out issues and making adjustments. The goal is to give you to give you an example of how to analyze and continuously improve your own systems.

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