Market Weekly Update

• Status of Key Market Parameter
• Silver Index is Locked in “Bump-and-Run” Pattern
• Gold Index is in “Three-Peaks and Domed House” Pattern
• US Dollar is a 12-Month “Falling Wedge” Pattern
• Broad Stock Market Broke Forming a 3-Month “Rising Wedge” Pattern
• Market Volatility is below the Panic Threshold
• Asset Class Performance Ranking with Gold Leading
• Sector Performance Ranking with Biotech Sector Leading
• BRIC Stock Market Performance Ranking with all BRIC Markets Lagging

The LWX Indicator in Last Four Weeks (Past)

The LWX Indicator in Next Four Weeks (Forecast)

Silver Index is Locked in Bump-and-Run Pattern

From the high of $49.75/oz on April 25 to the low of $32.31/oz on May 12, the silver index has experienced a 35% major correction. Based on the Bump-and-Run Reversal Top pattern on the silver index which I identified on 5/1/2011 (see here) and further explained on 5/8/2011 (see here), the silver index is in the late part of the “Bump” phase and has not entered the “Run” phase yet. As shown in the chart below, recently silver prices have swinged in the region between the warning line and the lead-in trendline.  More volatile swings should be seen in the region between those two lines before breaking through the lead-in trendline to start the “Run” phase. Investors should be aware of that the period of May and June typically is the worst season for silver, which is well-known by commodity traders (see here).

Gold Index is in a 8-Month “Three-Peaks and Domed-House” Pattern

The gold index has not got into the “Plunge” phase yet. The current up-swing could be wave 25 of George Lindsay’s “Three-Peaks and Domed House” model (see here).