Stock Market Update & Weekly Trend Outlook – Week 43

THE BIG PICTURE

The major stock market indexes moved higher yet again last week and remain in strong uptrends. Although we are overbought and overdue for a pullback, the best thing for traders to do is follow the price action and avoid getting caught up in the noise and anticipating the next move. If/When we enter a market pullback, your process should stop you out of the trade… or offer new looks on both the long & short side.

Here’s my weekly futures trading update and outlook. We’ll start by taking a look at the S&P 500 (NYSEARCA:SPY).

S&P 500 ETF (SPY) Chart – Week 42 (week of October 23)

A Note On Using MML Charts:  Using the Murray Math Level (MML) charts on higher time frames can be a useful market internal tool as price action moves among fractal levels from hourly to weekly charts. Confluence of levels may be levels of support/resistance or opportunities for a breakout move. Optimal setups will pass through Resistance or Support prior to moving in the opposite trend.

Technical Trends…

• Check out our week 42 recap and trend charts
• S&P 500 and Dow Industrials momentum at all time highs.
• Newly formed open gaps on all 4 stock market indices.
• VIX Volatility Index (INDEXCBOE:VIX) pushed back below 10.
• FANG/FAAMG stocks holding just off 52 week highs .
  • Upcoming earnings data
• VTI/FFTY/CANGX momentum remains upside.
• Uptrend Momentum: FEZ ytd return up 26.05% in comparison to SPY 13.99%
• Current IBD Outlook: Confirmed Uptrend (Chart Below)

Key Events in the Market This Week

• USA: GDP, PMI
• GLOBAL: GB GDP, JP CPI
• Q4 Earnings Season
  • GOOGL, AMZN, FB, MSFT

THE BOTTOM LINE

Technical Momentum probability on the indices remains in an UPTREND.

Murray Math levels continue to project higher short term resistance levels as momentum drives higher. Weekly charts at or approaching MML long term levels. Watch for MML setups on price action break above resistance high and back under resistance low for first signs of a pullback. Downside, watch for open gaps to be closed and 50% pullback as 1st level of support.

October permabears REMAIN and hoping for a pullback as Earnings Season now in full session with NQ market cap leaders reporting THIS WEEK. Continue to monitor FANG/FAAMG/FAAANG stocks pullback to play out the Nasdaq futures and Tech ETF momentum. Dollar index (UUP ETF) momentum downside, monitor on a pullback to 24.40.

STOCK MARKET INDICES: THE LOWEST OPEN GAPS

• S&P 500 Futures: 1589
• Nasdaq Futures: 3864.75
• Russell 2000: 1462.1
• Dow Industrials Futures: 14745

Attempting to determine which way a market will go on any given day is merely a guess in which some will get it right and some will get it wrong. Being prepared in either direction intraday for the strongest probable trend is by plotting your longer term charts and utilizing an indicator of choice on the lower time frame to identify the setup and remaining in the trade that much longer. Any chart posted here is merely a snapshot of current technical momentum and not indicative of where price may lead forward.

Thanks for reading and remember to always use a stop at/around key technical trend levels.

Twitter:  @TradingFibz

The author trades futures intraday and may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.