4/16/2010
Current Status of the LWX (Leading Wave Index)
The LWX in Last Four Weeks (Past)
The LWX in Next Four Weeks (Forecast)
The Broad Market Volatility is below the Panic Threshold
The BIX (Broad Market Volatility) closed at 5 on Friday and it is below the panic threshold level of 47. This level of the volatility indicates that the current market is bullish.
A Correction is Due
It is very interesting that Feds chose today to charge Goldman Sachs with fraud. Timing is everything! The latest report from OCC shows that Goldman Sachs still holds total $48.85 trillion of derivatives aganst its total $849 billion of assets. That is over 57 times highly leveraged. Goldman Sachs case is likely to increase calls for Wall Street reform. Today the DWC (Dow Jones Wilshire 5000 Composite Index) is derailed from its 10-week-old uptrend channel defined by two yellow lines. The broad market could run into a correction wave inside the 3-month uptrend channel defined by two pink lines. Currently the market is in the downtrend zone from the upper pink channel line towards the lower pink channel line. The magnitude of this potential correction is projected around 8%.
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Trend indicator: down
Momentum indicator: negative
Sector Ranking
The following table is the percentage change of sectors and major market indexes against the 89-day exponential moving average (EMA89). The Dow Jones Wilshire 5000, as an average or a benchmark of the total market, is up 5.97%. Outperforming sectors are Semiconductors (up 11.43%), Banks (up 10.17%), and Consumer Services (up 8.87%). Underperforming sectors are Pharmaceuticals (down 0.47%), Telecommunication (up 0.60%), and Utilities (up 0.61%). The Russell 2000 small-cap (up 9.79%) is outperforming the market, and the Dow (up 4.64%) is underperforming.
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