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US Equity Market Outlook 2-16-16 (video)

The video focuses on the near-term outlook for the US stock market while also touching on the intermediate-term & longer-term outlook, expanding on the following:

  • Long-term: Both the long term-trend as well as the long-term outlook for the US equity markets remain bearish at this time. As such, any short-term & intermediate-term bullish developments & charts patterns are likely to experience an increased failure rate and those bullish chart patterns that do play out more likely to fall shy of their typical measured targets.
  • Intermediate-term: The intermediate-term outlook (roughly 1 - 6 weeks) is somewhat unclear right now, with both bullish & bearish technical developments in the broad markets.
  • Short-term: I remain "cautiously bullish" in the near-term, leaning towards a bounce that could carry into the end of this week, possibly further, but while the odds of another sharp leg down in the equity markets are still somewhat elevated, the risk/reward does not warrant positioning aggressively long or short at this time. As such, I continue to hold a mild net long exposure to US stocks.

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Feb 15, 2016 4:04pm|Categories: Equity Market Analysis|Tags: , , , , , , , |7 Comments

7 Comments

  1. snp February 15, 2016 6:05 pm at 6:05 pm

    great video. watching and learning what you look for.

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  2. astoria26 February 16, 2016 11:13 pm at 11:13 pm

    Fantastic video, thanks Randy! Another thing that gives me pause is that S&P actually broke below Jan’s low of 1812 last Thursday, to 1810 briefly, before rallying back. Double bottoms are supposed to hit the same or slightly higher low, right? Or does that matter?

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  3. rsotc February 17, 2016 8:29 am at 8:29 am

    @astoria26 Thanks. Not sure what the textbooks say but my preference is to see two nearly equal tags for a double bottom & even better is the second bottom slightly undercuts the first, as that tends to run a lot of stops, suck in some new shorts & shake out some of the weak-handed longs… all of which makes for a more sustainable or sharp rally once if becomes apparent that the support level held. With that being said, I still have my concerns about just how long or far this rally can go & will most likely have booked profits on some or possibly all of my long exposure (in the trading account) by the end of this week.

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    • astoria26 February 17, 2016 2:27 pm at 2:27 pm

      I think it was Jan 15 when S&P broke below the previous lows of 1871 (from last Oct) and 1867 (last Aug) to 1858, that someone told me that’s how they know its a bear market now, b/c it broke support with no hesitation. So I guess I associated breaking below a previous low to being bad news, vs. a “good” double bottom that can ignite a rally. I hope that makes sense? But this time seems different, it only broke below support by a little bit, then rallied very quickly. Its been so difficult to figure out the market lately!

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    • astoria26 February 18, 2016 2:35 pm at 2:35 pm

      @Right Side Of The Chart, sorry forgot to tag you earlier, would love to hear your thoughts on the previous time S&P broke below support on Jan 15 vs. last week on Feb 11, why they were different? Thanks!

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  4. rsotc February 18, 2016 3:03 pm at 3:03 pm

    @astoria26 Good point. If you tag me by adding “@” before my username @rsotc (not my display name, which is Right Side Of The Chart), then I will receive an email notification & less likely to miss a question.
    I can’t recall all the factors that went into my analysis back on Jan 15th but I do recall stating that one of (but not the only) reason that I was not only NOT shorting the Feb 11th intraday break below support but that I was actually staying net long & “cautiously bullish” was the potential divergences not just on the 60-minute time frame but much more importantly, on the daily time frames. Rare that you see positive divergence on the daily time frames (or even the 60-min+ frames) not play out for at least a tradeable bounce lasting several days to weeks. I expanded on my reasoning for expecting a reversal off the Feb 11 lows in this post from that day: http://rightsideofthechart.com/qqq-spy-support-target-levels/

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    • astoria26 February 18, 2016 3:40 pm at 3:40 pm

      Gotcha, thanks!

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