The Greedy Trader Weekly Analysis
Sign In Jul 2, 2020
Skip Navigation Links
Stock Market Trend Analysis Newsletter.
Weekly Market Overview - 14/28/2020

Weekly Stock Market Overview
(March 20, 2020)

S&P 500 index

During the past week, Dow Jones lost 17.3%, the S&P 500 - 14.9%, and NASDAQ - 12.64%. Once again all three major U.S. indices suffered the biggest weekly loss since October 10, 2008 when S&P 500 had lost more than 18.2% in one week. While usually NASDAQ is more volatile than S&P and Dow Jones, the technology companies now show more resilience than other sectors, since virus does not affect technologies as much as the industries that require intense human interactions.

All three major US indices have an oversold weekly Williams' Percentage Range (W%R) and oversold daily Lane's Stochastic, while monthly Lane's Stochastic is still overbought.

S&P 500 Trend Analysis:

In our previous S&P 500 Cycle Trend Analysis, published on March 13, 2020, we suggested:

Considering how sharp was the weekly downtrend, the breaking channel support scenario has more chances. In this case, as you can see from the chart, the next support level is at 2346.58 that marks 30.85% decline from recent high.

^GSPC: S&P 500
Chart: S&P 500 weekly down trend


During the week, S&P 500 price has bounced several days around the 2346.58 support level, and it closed the week below this level. The next support level is at 2134.72.

The current S&P 500 down trend started on February 19, 2020 at 3393.52 and reached 2280.52 on Wednesday, March 18, losing 32.8&%. The wave is moving in a falling channel and has formed a five sub-waves structure that represents the Elliot Waves impulse wave pattern. According to Elliott Wave theory, the impulse wave appears in a strong trend and has the same direction as the main trend; it is usually followed by three sub-waves correction structure in the opposite direction.

^GSPC: S&P 500
Elliot Waves impulse wave

The fifth sub-wave of the Elliott Wave impulse pattern might not be over yet, but the oversold daily and weekly stochastic indicators show that it might be completed soon. The completion of the impulse pattern can be confirmed only when price will break the falling channel resistance trend line.

Following is the list of some bullish and bearish technical signals: Bearish signals:
  • overbought monthly Lane's Stochastic
  • falling channel chart pattern
Bullish signals:
    oversold weekly Williams' Percentage Range (W%R)
  • oversold daily Lane's Stochastic
  • Nasdaq daily MACD and Lane's Stochastic bullish divergence
  • Elliott Wave impulse wave structure almost completed
As you can see, there are more bullish technical signals than bearish, but all bullish signals are short-term, while bearish signals are in the longer time frame.

The Best Trading Strategies for the Trending Market

Since February 19, 2020 the market is in distinct downward trend. There are trading strategies that work best in trending market. Some of them use the trend following indicators.

Moving Average

The Moving Average is one of the trend following indicators that works pretty well in trending market, but gives a lot of noise in ranging market (when the price moves in a range). When the stock price crosses above the Moving Average, it generates a buy signal, and when the price crosses below Moving Average, it generates a sell signal.

The chart S&P 500 index below shows how to use 200 Day Moving Average. The strategy generated a buy signal on June 28, 20016 when ^GSPC closed at 2036.09 above 200 MA (2021.42). The sell signal was generated on April 2, 2018 when S&P 500 closed at 2581.88 below 200 MA (2589.85). This trade made more than 26% gain in 20 month.

^GSPC: S&P 500
Chart: S&P 500 200 Day Moving Average


On March 4, 2020, the price crossed below 200 Day Moving Average generating the latest sell signal. The next buy signal will be generated when the price crosses above the 200 MA line.

The Moving Average is the lagging indicator, and it gives the signals only after the substantial price change. In order to get more sensitive signals, you can use less number of days for the moving average.

Below is the S&P 500 chart with 20 Day Moving Average. 20 MA generated a sell signal on February 21, just two days after the start of the market downtrend. Usually 20 MA strategy is very sensitive, and in a ranging market it generates a lot of noise, but it works very well when there is a steep-slope trend.

^GSPC: S&P 500
Chart: S&P 500 20 Day Moving Average

Parabolic SAR

Parabolic SAR is another strategy that uses trend following signals. The chart below presents Nasdaq (^IXIC ) Parabolic SAR buy/sell signals. Similar to the Moving Average indicator, the by signal is generated when the stock price crosses above the Parabolic SAR line, and a sell signal is generated when the price crosses below the Parabolic SAR line. The left part of the chart below represents the ranging market, while the right part represents the strong trending market. You can see that Parabolic SAR signals in the trending market are much more profitable than in ranging market. The latest sell signal was generated on March 5 at 8738.59 and a buy signal was generated on Friday, March 20 at 6879.52. This trade made more than 26% gain in 20 month.

^IXIC: Nasdaq
Chart: Nasdaq (^IXIC ) Parabolic SAR


The Technical Stock Screener provides the list of trend following signals:
  • Price Crossed Above 50 Day Moving Average
  • Price Crossed Below 50 Day Moving Average
  • Price bounced up off 50 Day Moving Average
  • Price bounced down off 50 Day Moving Average
  • Price Rises Above Parabolic SAR
  • Price Falls Below Parabolic SAR
  • Daily Golden Cross
  • Weekly Golden Cross
  • Monthly Golden Cross
  • Quarterly Golden Cross
  • Daily Death Cross
  • Weekly Death Cross
  • Monthly Death Cross
  • Quarterly Death Cross
This page also provides a weekly list of S&P 500 stocks that generated above trading signals.

ETF's Indices Alert

During the past week, CurrencyShares Australian Dollar Trust (FXA) fell 4.40 points and closed at 58. The volume was 97% above average. The weekly volatility was 489% above average. The daily Lane's Stochastic main line (K%) crossed above the oversold signal line (D%). The FXA price is below the 20 and 50 Day Moving Averages. Technical indicators are oversold in monthly, weekly, and daily time frames and have bullish divergence.

FXA: CurrencyShares Australian Dollar Trust
Chart: CurrencyShares Australian Dollar Trust (FXA)

S&P 500 Sector Rotation

The Consumer Staples sector was the most resilient sector last week (-10.97%), followed by the Materials sector (-12.53%). The Energy sector was the worst performing sector of the week (-19.66%), followed by the Industrial sector (-18.33%).

The Healthcare sector is the most overvalued sector, followed by Utilities, while Biotechnology, Specialized Health Svcs, and Diversified Utilities are among the most overvalued industries. The Basic Materials sector is the most oversold sector, followed by Services, while General Entertainment, Oil & Gas Equipment/Svcs, and Aluminum are among the most oversold industries.

Bear market correction can be mistaken for the start of a new upswing.
Weekly uptrend has formed a Rising Wedge chart pattern. The Rising Wedge in downtrend indicates that higher level downtrend is not over yet.
Apr 17, 2020
Reduce the risk and use some stop losses techniques
S&P 500 Elliot Wave's cycle consists of eight waves; the five-wave motive phase followed by three-wave corrective phase.
Apr 12, 2020
The Best Trading Strategies for the Trending Market
S&P 500 Elliot Waves Analysis: falling channel has a five sub-waves impulse structure.
Mar 22, 2020
S&P 500 Bearish Trend Analysis
What to expect if the S&P breaks the long term rising channel support trendline.
Mar 14, 2020
S&P 500 Rising Wedge Breakdown
The S&P 500 intermediate trend Rising Wedge breakdown caused the biggest weekly loss since October 2008.
Mar 1 , 2020
NASDAQ biggest weekly advance
It was the biggest weekly NASDAQ advance recorded. More than 30% of S&P members are trading at their highest price in the past 52 weeks.
Jan 7 , 2018
Eighth consecutive positive week
It was the eighth consecutive positive week for S&P 500 index. More than 40% of S&P 500 component stocks have overbought weekly Lane's Stochastic. It is the highest level since April 29, 2016.
Nov 5 , 2017
ETF's Currency Shares Alert.
CurrencyShares Swedish Krona Trust (FXS) weekly downtrend reached 116.62 on September 27, making the biggest weekly drop since October 2015.
Sep 24, 2017
Dow Jones Industrial Average monthly uptrend - five-wave structure.
The Dow Jones Industrial Average monthly uptrend has formed a five-wave structure. It started on April 19, 2017 at 20,379.55 and reached 22,419.51 on September 21, 2017.
Sep 24, 2017
Sixth consecutive positive week for the S&P 500.
Almost 56% of S&P 500 component stocks have overbought weekly Williams' Percentage Range. It is the highest level since December 26, 2014.
Mar 5 , 2017
Third consecutive negative week for the Dow Jones
Almost 40% of S&P 500 component stocks have oversold daily Lane's Stochastic. It is a highest level since November 16, 2012.
Mar 15, 2015
Dow Jones is near 200 Day Moving Average
During the past week, Dow Jones Industrial Average sank 507.65 points or 2.87%, to 17164.95. Williams' Percentage Range and Lane's Stochastic are overbought in a monthly time frame. The Dow Jones price is near 200 Day Moving Average.
Feb 1 , 2015
S&P 500 at highest level since Oct 2007
The major indices and more than a half of S&P 500 members are strongly overbought in daily, weekly, and monthly time frames.
Mar 17, 2013
S&P 500 members Downtrend Resistance Alert
Dow Jones, NASDAQ, and More than 40% of S&P 500 members have the Downtrend Resistance Alert.
Oct 30, 2011
The short-term rally is over
S&P 500 index may break the support around 1100 and move down to the next support area around 1000 - 950.
Sep 5 , 2011
S&P 500 is close to the 50 Day Moving Average
S&P 500 index has fallen below the Parabolic SAR (stop and reversal). Price is close to the 50 Day Moving Average.
Mar 13, 2011
S&P 500 index wave's structure
S&P 500 medium-term uptrend has a five wave's structure. The fifth sub wave is near completion.
Dec 26, 2010
Monthly W%R is strongly overbought for the first time since October 2007
The S&P 500 technical indicators are pretty close to the beginning of October 2007, just a week prior the beginning of the bear market of 2007-2009.
Oct 17, 2010
More than a half of S&P 500 members are overbought
More than 10% of S&P 500 index members made a new 52-week high, but almost a half of them closed this week below the previous week's close.
Sep 12, 2010
S&P 500 members - Trend Support Alert
Daily and weekly indicators are oversold for all three major US indices. More than 28% of S&P members are oversold, and more than 22% have a Trend Support Alert.
Jul 4 , 2010
S&P 500 members - Downtrend Resistance alert
More than 60 S&P members have the Downtrend Resistance Alert. Daily Williams' Percentage Range and Lane's Stochastic are strongly overbought.
Jun 20, 2010
S&P 500 members - uptrend support alert
More than 30% of S&P 500 members have an uptrend support alert. This alert indicates that stock price is near the monthly uptrend support level.
May 23, 2010
Dow Jones Elliott Wave count
Dow Jones gained 68.03% in 53 weeks. The chart has formed a Rising Channel chart pattern. Fifth wave up is in progress.
Mar 21, 2010
NASDAQ at the highest level since September 2008
NASDAQ medium-term trend has formed a five-wave structure. The fifth wave is in progress now. The price is near the trend resistance line (2331.43).
Mar 5 , 2010
Is Dow Jones going above January high soon?
Dow Jones has advanced above the 50 Day Moving Average. MACD line has moved above its signal line. Both crossovers are considered as bullish signals.
Feb 19, 2010
The Dow Jones has formed a falling channel pattern
The Dow Jones lost 932.06 points, or 8.66%, since January 14. The downtrend has formed a falling channel pattern.
Feb 7 , 2010
The Dow Jones short-term down trend is near the support line
The Dow Jones is near the support line. Daily technical indicators are oversold. Almost 20% of S&P 500 members have an uptrend support alert.
Jan 31, 2010
S&P 500 has crossed below the 50 Day Moving Average
S&P MACD line has moved below its signal line; the price has crossed below the 50 Day MA and has closed below the lower Bollinger Band.
Jan 24, 2010
The Christmas rally has pushed the stocks ahead
The trend following indicators have turned bullish, while almost 20% of S&P 500 members are overbought.
Dec 25, 2009

Creative Commons License
This work is available under the terms of the
Creative Commons Attribution-NoDerivs 2.5 License.
Warning: TheGreedyTrader.com presents weekly analysis. Technical indicators and trend parameters are calculated for the close of business day indicated on the top right corner of the screen.

Copyright© 2004-2018 All rights reserved.