Will the Stock Market Keep Falling?

Welcome to this Week’s Stock Market Outlook. I discuss price action of the major indexes, some top RS stocks, and what I’m looking for to indicate a new bull market.

Everyone how’s it going this is richard and welcome back to the stock market look video sponsored by market smith as always we’re going to run through the major indexes talk about the current market conditions and also cover some key stocks that i’m watching pretty closely and could give a tell about where the market’s gonna go uh so with that said let’s start off

With uh the nasdaq composite on a daily chart here and you can see the big reversal we had here on this thursday when obviously the cpi numbers came out we had a very large gap down but then a strong recovery and then the very next day we had another reversal obviously this this time to the downside where we gave back a lot of that progress however it is key to

Note that we have not broken this significant low so as of right now there is a rally attempt in progress and we’re on day two of that so we could get a fall through day signal for those can slim traders out there sometime next week keep in mind that there have been previous fall through days during this downtrend that have not ended up working but it is something

To keep in keep in mind um and also along with that fall through day obviously there’s the index component um ross calls this the quantitative aspect of it but there’s also the qualitative aspect of a fall through day which is the health and breadth of market leadership which at this moment is pretty darn poor um the solar stocks have taken a hit um basically

There’s some biotech names that are acting well but are pretty much pretty small if you bring up stocks like acro these have been you know running pretty well but it’s not quite enough to support a widespread rally and going back to the nasdaq here we’re really going to need you know three to four of those promising growth groups to act well to really support a

Potential new uptrend and right now we don’t have that oil and gas is popping back into those relative shrunt screens we’ve got some transports that are acting well but right now you know things are pretty much in downtrends so that’s pretty much it from the nasdaq we’re just basically below a declining 21 50 and 200 sma the trends remain down that’s really been

The story for the major majority of this year and we’ll just have to see whether we can hold this previous low that’s definitely a key level and also just going to a weekly chart we’ve obviously got this level to the downside 10 000 as well as a key spot um and uh yeah right now we’re just into stage four downtrend here and going over to a monthly you can see that

This really is the most significant correction we’ve had in quite a while since 2008 as well as the 2000 correction so moving on to the s p 500 the story is very similar here i know some people have been posting this trend line uh who knows if we get down to this level but once again this kind of covid or pre-covet high is another key spot to watch um and for

This to be kind of symmetric we’d have to kind of base out and move for move sideways for a bunch more weeks to really well a bunch more months to really start a kind of symmetrical type shape to this base so right now just in a downtrend on a weekly chart stage four downtrend uh we’ll just have to see what happens and uh yeah right now the trend is down on this

Index as well looking at the small caps let’s take a look at the iwm first things first this obviously has gotten hit a lot harder it broke before those other two major indexes were in a stage where downtrend here um and let’s go over to a daily chart this is right at its previous lows it undercut and rallied here on this day so once again this prior low is a

Significant level but once again the trends are down on you know basically all the time frames on this index and we were rejected at that declining 21 ema looking at small cap growth in particular this held above its previous low so that is something to keep an eye on that divergence here and we’ll have to see whether we can hold above this prior low as well and

Once again we are rejected at that 21 ema bringing up arc you can see this is also just in a downtrend we’ve broken below those previous lows very negative reversal here um on this friday and you can just see from the relative shunt rating that this has been you know a very poor performer over the past year or so lastly let’s take a look at the fft why and once

Again this is just in a downtrend i know it might sound repetitive here but that’s pretty much what these indexes are doing they’re in downtrends in stage fours um and we’ll just have to look for those names and groups that are acting better than the indexes and they will be popping up before the overall market does its turn so stay vigilant even if it might feel

Repetitive and useless to keep track of stock showing relative strength that process that routine is gonna basically pay off in a huge way once we finally do get a large tradable rally or even the bottom um because you’ll be a step ahead and you’ll have identified those potential leaders before the market rallies off its lows and has that fall through day so make

Sure you’re doing your homework and keeping tabs on groups and stocks that are acting well making new highs before price making new relative strength highs that are holding above their moving averages because that work is definitely going to pay off with that said let’s move on to a few kind of key stocks that i’m watching uh first let’s go through the kind of

Thing type names uh first taking a look at tesla obviously not a fang stock uh but it’s one of you know it’s basically at that level at this point uh this is very negative very sharp downtrend over the past few weeks or so uh maybe a little bit oversold uh looking at where it is with respect to its moving averages but nevertheless a very negative chart you’ve got

Kind of double outside bars here obviously this one on thursday to the upside then on friday giving all that back and then some and we’re right at this prior kilo we’re actually just undercutting that and going to a higher time frame look at the weekly chart you can see that we’ve had a strong prior statue uptrend and now potentially a larger kind of stage three

Distribution phase and right now we’re right at the lows of you know this prior base as well as you know these key levels so not a great look from the stock and we’ll have to see whether it can rally obviously we’ve got earnings in three days so that could really shake things up and i’d love to see um you know a gap up you know that’d be strong for the bulls but

You know kind of of um there’s that saying that surprises occur in the direction of the trend and right now that trend is down we are in a stage four as we undercut this structure moving on to apple let’s take a look at that chart once again um you know very negative on the weekly let’s go to a daily chart a very sharp decline below declining 21 ema we’re below

A declining 50 and 200 sma downside reversal um on friday but we’re holding above this low so once again this level is pretty key this in general has been holding up better than some of these other stocks but we’ll have to see what happens definitely a bad look if we undercut this prior low especially if we challenge this spot right here looking at amazon let’s

Bring up that chart uh you can see it’s a little bit worse below declining 2150 200 sma stage four here um and uh we are holding above these lows which is a good sign but we’ll have to see uh whether we challenge that and undercut them in the coming weeks uh days and weeks and uh yeah basically what happens if we do test that level uh moving on to facebook let’s

Take a look at meta this is just an ugly stage four downtrend uh definitely the weakest of those bigger cap names you can see rs rating is a 13 and we had that huge earnings gap down and really signs of weakness even before that gap down so uh yeah nothing really to do with regards to this stock unless you’re short maybe from this breakdown this base breakdown we

Have that gap down after it retested the 50 sma from the downside or you know prior entries right here but yeah not a great look and definitely a very weak chart and just go into a weekly chart actually let’s go into a monthly you can see that this is a very significant trend change um since that ipo run which was so successful and definitely a changing character

Of the stock and definitely a negative changing character as well moving on to google let’s take a look at it on the daily chart once again just in a downtrend at this point holding above this low for the time being it has undercut this prior low and we’re below declining 21.50 and 200 sma netflix although it has gone hammered quite a bit over the past few months

It’s actually been holding up reasonably well you can see the relative strength line has been increasing it’s still definitely in a stage four downtrend but we do have kind of a key level here worth watching for short-term trade potentially and even friday when a lot of stocks gave back most of their moves you can see it didn’t really get back that much and we’ll

Just have to see what happens it is kind of fighting that 50 sma at this point but you know it is it is showing some constructive action maybe we push up form a little bit of a handle right below this level and then there’s a potential trade into this gap area but that 200 sma will be coming down and could act as resistance so be aware of that as well but just in

General over the past few months or so it’s acted better than you know livestocks and you can see over this period how the overall market’s been doing and how netflix has been doing and that’s why the relative strength line is increasing and we do have earnings in two days so keep that in mind just in general be aware of any stock that you’re looking at when is its

Earnings date and maybe even check a few different sources because you do not want to be surprised and own shares in a stock that’s reporting earnings if you don’t have a cushion that’s just gambling and that’s not good risk management so with that said let’s move on to a few other stocks that have been holding up well in the healthcare biotech space regn has been

Acting pretty well we did have this nice earnings gap up it had an initial move but you know that was kind of pushed down by the market especially on this friday but still is holding up really well right near all-time highs um and uh so far it’s definitely showing relative strength moving on to acro i already showed this but this is a name that’s been acting really

Well um myov is a similar kind of look to it although this gap up was due to a cancellation of a takeover or some type of news like that so keep that in mind you can actually see the news back here so it’s not an earnings gap or announcement or anything like that but we’ll have to see whether it can push from this point just going to a weekly chart we can see

Some of the other names that are acting well cprx miov already brought up um this one it looks like a takeover here imux big gap up let’s go over to it daily here so beautiful move from this hvc and now we’ll see if it can kind of settle up and tighten right near 10 maybe give an opportunity for me a higher low type setup going back to the weekly i think bl lte

It’s another worth watching not great recent action but maybe can base above 22 and some other names i know some people haven’t watched been watching this one hlit which isn’t in the biotech space but is acme super strong trending above those moving averages so kind of look for those divergences i know people have been watching aehr which if you can base above

This level would be awesome super strong off these lows and we’ll just have to see what happens but let me know in the comment section what sucks you’re watching as of this moment and uh basically you gotta just keep doing your homework keep doing your screens and we’ll have to see what happens but a lot of former leaders you know celh they’re in short-term down

Cycles um you got a failed breakout short opportunity right here then it broke down through this wedge as well as the 50 sma and then on friday it reconfirms the downside emph in the solar space kind of similar action failed breakout failing at the 21 ema here in one big bar here then reconfirmed after a wedge wedging up here into the 50 sma a bad close on this

Day and then broke the 50 sma and you know fell completely apart here and now we’re just once again trending down so fslr within the space is another one that’s kind of on um you know shaky footing here at the 50 sma not great action recently and this just looks like an ease of base so we’ll have to see whether it can hold above 120 and this prior low so uh with

That that’s pretty much it for the stock market outlook video let me know your thoughts on the market down below and if you did enjoy my analysis please go ahead and leave a like down below subscribe if you’re new to the channel and uh yeah best of luck next week and i’ll see you guys in future videos take care

Transcribed from video
Will the Stock Market Keep Falling? By Richard Moglen