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12/11/2011

December 11, 2011 Leave a comment Go to comments
Table of Contents
  • Status of Key Market Parameters
  • Broad Stock Market is in a “Symmetrical Triangle” Pattern
  • Broad Market Instability Index is below the Panic Threshold
  • Gold is Still in a “Bump-and-Run” Pattern
  • Silver is Still in the “Run” Phase
  • US Dollar is in a “Symmetrical Triangle” Pattern
  • 30-Year US Treasury Bond is Forming a Horizontal Channel
  • Asset Class Performance Ranking with Oil Leading
  • Sector Performance Ranking with Pharmaceuticals Sector Leading
  • BRIC Stock Market Performance Ranking with All BRIC Markets Lagging

Current Status of the LWX (Leading Wave Index)

The LWX Indicator in Last Four Weeks (Past)

The LWX Indicator in Next Four Weeks (Forecast)


Broad Stock Market is Forming a “Symmetrical Triangle” Pattern

The Dow Jones Wilshire 5000 index, as an average or a benchmark of the total equity market, is forming an intermediate-term “Symmetrical Triangle” pattern (see here). The price trend can be any direction leading to this pattern depending on which side to break out. The Wilshire 5000 index is above the 89-day moving average and it is in the choppy zone of the triangle with positive 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 bullish on Friday. Most likely the market may test the upper boundary of the symmetrical triangle in the next several days. The bullish time-window forecasted by the LWX will end by 12/15/2011. This coming week could be the last bullish week of 2011.


Broad Market Instability Index is below the Panic Threshold

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 2 on Friday. This reading is far below the panic threshold level of 46, and it indicates that the current market is bullish. The BIX is plotted in the following chart as compared with the Wilshire 5000 index.


Gold is in “Bump-and-Run Reversal Top” Pattern

The gold index is still in an intermediate-term “Bump-and-Run Reversal Top” pattern and it now is in the “Bump” phase. The next target prices: 1) 1570 at the Lead-in Trend Line, and 2) 1400 at the Target Line.


Silver is in the “Run” Phase

The silver index is still in the “Run” phase of the “Bump-and-Run Reversal Top” pattern. The downside price target is project at 24 on the third target line, which is close to the price level when this pattern originally started on the left side of the following chart.


U.S. Dollar is Still in the “Symmetrical Triangle” Pattern

The US dollar index is still in the 11-month “Symmetrical Triangle” pattern (see here).


U.S. Treasury Bond is Forming a Horizontal Channel

The 30-Year US Treasury Bond index is forming a horizontal channel pattern (trading range) between the upper boundary at 145 and the lower boundary at 135.


Asset Class Performance Ranking with Oil Leading

The following table is the percentage change of each asset class (in ETFs) against the 89-day exponential moving average (EMA89). Currently Oil and Bond are outperforming. Food and gold are underperforming.


Sector Performance Ranking with Pharmaceuticals 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 2.18% above the EMA89. Outperforming sectors are Pharmaceuticals (4.29%), Technology (3.04%), and Consumer Services (3.00%). Underperforming sectors are Materials (-1.10%), Banks (-0.80%), and Biotech (-0.53%). The Dow Jones Industrial Average (3.84%) is outperforming the market, and the NASDAQ 100 (1.64%) is underperforming.


BRIC Stock Market Performance Ranking with All BRIC Markets Lagging

The table below is the percentage change of the BRIC stock market indexes against the 89-day exponential moving average (EMA89). All BRIC markets are underperforming the US market.

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