Table of Contents
- 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 Forming a 4-Month “Ascending Broadening Wedge” Pattern
- Market Volatility is above the Panic Threshold
- Asset Class Performance Ranking with Gold Leading
- Sector Performance Ranking with Pharmaceuticals Sector Leading
- BRIC Stock Market Performance Ranking with Russian Markets Leading
Current Status of the LWX (Leading Wave Index)
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
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. The “Run” phase could happen once prices break down the lead-in trendline. The silver index may also be in the progress of a “Dead-Cat Bounce” pattern (see here) to start a postbounce decline. The lead-in trendline now is a critical line to be watched out.
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 new down-swing could be wave 26 of George Lindsay’s “Three-Peaks and Domed House” model (see here).
U.S. Dollar is Forming a 12-Month Falling Wedge Pattern
The US dollar has formed a 12-month “Falling Wedge” (see here) pattern which is a potential bullish reversal pattern sooner or later as it matures. It now is going to test the upper boundary of the wedge. The US dollar could be in a bullish reversal once it breaks above the upper boundary of the wedge.
Broad Stock Market Index Forming a 4-Month Broadening Wedge Pattern
The Dow Jones Wilshire 5000 index, as an average or a benchmark of the total equity market, is forming a 4-month “Ascending Broadening Wedge” (see here) pattern. Currently the market is below the 89-day moving average and it is in the choppy zone of the broadening wedge with negative readings of both the trend and momentum. The Leading Wave Index (LWX) indicator, color coded in the price bars of the following daily chart of the Wilshire 5000 index, closed in bearish on Friday. The LWX forecasts that next four weeks should be in a bullish time-window for the broad equity market.
Broad Market Volatility is above the Panic Threshold
The Broad Market Volatility (BIX), measured from over 8000 U.S. stocks, closed at 262 on Friday, and it is above the panic threshold level of 44. The BIX above the panic threshold indicates that the current market is bearish. The BIX is forming a significant volatility spike. The BIX is plotted in the following chart as compared with the Wilshire 5000 index.
Asset Class Performance Ranking with Gold Leading
The following table is the percentage change of each asset class (in ETFs) against the 89-day exponential moving average (EMA89). Currently gold and treasury bonds are outperforming. Oil and the stock market are underperforming.
Sector Performance Ranking with Biotech Sector Leading
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 index, as an average or a benchmark of the total market, is 3.04% below the EMA89. Outperforming sectors are pharmaceuticals (+1.67%), Healthcare (+1.45%), and Biotech (+0.93%). Underperforming sectors are Banks (-8.96%), Precious Metals (-6.77%), and Financials (-6.06%). The Do Jones industrials (-2.24%) is outperforming the market, and the Russell 2000 small-cap (-4.30%) is underperforming.
BRIC Stock Market Performance Ranking with Russian Market Leading
The table below is the percentage change of the BRIC stock market indexes against the 89-day exponential moving average (EMA89). The Russian and India markets are outperforming the U.S. market, and the Chinese and Brazilian markets are underperforming the U.S. market.
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