Stock Market Outlook
For The Week Of August 22nd = Uptrend

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

The ADX flipped to a bearish signal on Tuesday. But 4 distribution days fell off the count for the price/volume signal, moving it back to an uptrend.

2021-08-22-SPX Trendline Analysis - Daily

Elliott Wave remains in an uptrend. If correct, the current i/ii wave looks really similar to the i/ii wave set-up in late May and early June (shape and duration).

2021-08-22-SPX Elliott Wave Analysis - Daily - Primary 1

COMMENTARY

After notching a new all time high last Monday, the S&P500 ($SPX) took a break. Prices retreated from the channel's upper trendline, falling towards the 50-day moving average.

The drop was pretty much over before it began, as the index rallied higher into the weekend. It starts this week ~2% above the 50-day moving average and ~10% above the 200-day moving average.

The reason behind last week's sell-off was the release of meeting minutes from the last Fed meeting. Or I should say the discussion of tapering bond purchases included in those minutes.

This week could prove just as eventful, as the Fed's chairman is scheduled to speak at the central-bank symposium in Jackson Hole, Wyoming. You may remember that a similar speech, back in 2013, when comments were made about reducing QE. That speech triggered the so-called "taper tantrum" and the S&P500 sold-off about 6%.

While it definitely IS different this time, that doesn't really mean much when it comes to the reaction you'll see in various markets. There are reasons for the market to continue higher, as well as reasons for it to sell off. Whether buying or selling, let the trades come to you.

Best to Your Week!

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Charts provided courtesy of stockcharts.com.

For historical Elliott Wave Analysis, go to ELLIOTT WAVE lives on by Tony Caldaro. Other interpretations can be found at: Pretzel Logic, and 12345ABCDEWXYZ

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.

• 2015 Performance - Stock Market Outlook
• 2016 Performance - Stock Market Outlook
• 2017 Performance - Stock Market Outlook
• 2018 Performance - Stock Market Outlook
• 2019 Performance - Stock Market Outlook
• 2020 Performance - Stock Market Outlook

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