7/23/2010
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 15 on Friday and it is below the panic threshold level of 47. The volatility level of 15 indicates that the current market is bullish.
Market is above the falling wedge
The Dow Jones Wilshire 5000 (DWC) has crossed over the upper boundary of the 3-month Falling Wedge pattern (between two yellow lines) inside the 16-month uptrend channel (between two red lines). The falling wedge is typically a bullish pattern, and the bullish bias is realized after a resistance breakout from the upper boundary of the wedge. Currently the market is in the uptrend zone above the falling wedge, and it is going to test the 89-day moving average (the white dotted line). The colors on the price bars represent the status of the LWX (Leading Wave Index).
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Trend indicator: up
Momentum indicator: positive
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 0.11%. Outperforming sectors are Real Estate (up 3.35%), Internet (up 3.34%), and Utilities (up 3.33%). Underperforming sectors are Banks (down 4.22%), Health Care (down 4.03%), and Pharmaceuticals (down 3.00%). The S&P 400 Mid-cap (up 1.02%) is outperforming the market, and the S&P 500 (down 0.08%) is underperforming.
The Chinese Market
The following chart is a weekly chart of the Shanghai Stock Exchange Composite Index. Since the bearish dead cross in the early of this year, the Chinese market has been in a downtrend by staying under the 17-week moving average (equivalent to 89-day moving average). It is currently in a 12-month downtrend channel (between two blue lines), and in the choppy zone of the channel between 2250 and 3000. However, if the index crosses over both of the 17-week moving average and the pink dotted median line of the 12-month downtrend channel around 2650 marked by a red circle, it should be characterized as a potential bullish golden cross. The Chinese market is very near that point. Watch out next week.
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