Stock Market Analysis - 22nd October 2018

22 paź 2018

Here we go with the stock market update for Monday 22nd October 2018, following some few weeks of trading craze. Following from previous analysis we predicted a big bounce and a possible continued sell off.

On Tuesday we had a big bounce with more than 500 points gain on DOW JONES which slowed down on Friday; see the weak candle and lots of selling pressure. We should still expect a bit of selling to carry on.


I will state here that the bottom of the drop is closed around our support level of 25,000 points probably a sell off to 24,500 points or 24,000 points but support is somewhere around or below 25,000 points up to 24,000 points as support is building up around these points. Bearishness should continue this week. The futures are down indicating Monday 22nd October 2018 should be bearish although volatility to back off a bit.

On a positive note; The stochastic is pulling up, RSI is pulling up, MACD is still chasing up but not there as of now,

Bollinger band reflects pulling away from bottom band signifying a bullish trend.at least seems the bearish move is weakening.

However, the best news here is the long term moving average; we continue to maintain the trend despite all the previous sell off.

Watch out for a big bearish week

NASDAQ

The NASDAQ is a bit more bearish selling off to 7300 points is my expectation, the oscillators on NASDAQ also bullish but notice RSI turned back down and MACD is separating. I guess this is a short term bearishness it also applies to the QQQ.

The possibility is that by November 2018, the bulls will come back fully as the big picture overall is Bullish.


VOLATILITY INDEX

Consider, the volatility index (VIX) measuring the S&P 500 futures see the first green arrow and the spike that occurred 2 weeks ago and the resumption of selling without the spike which is a good signal. Mae reference to February sell off and the spike and see what follows up. This is not supposed to be a concern but if it reverses we ride the market.

Elliott wave shows a bullish continuation on the DJIA with targets of 265, these tallies with the big picture. It does not have to go straight to target.

In conclusion

I cannot specifically give trade ideas considering the unsettled market and volatility but let us allow the market settle and stabilized possibly go through earning and trade tips can be provided with clear direction.

Have a great trading week and with another update mid-week.

See you!