03/01/2015 – Market Update
Stock Market in Consolidation
Table of Contents
- Broad Market in Short-Term Bearish Time-Window
- Sector Performance Ranking with Home Construction Sector Leading
- S&P 500 Index in Primary Impulse Wave 5
- German DAX Index: Elliott Wave
- India Bombay Stock Exchange Index in Bump Phase
- Shanghai Composite Index: Long-Term Picture
- Major Global Markets Performance Ranking
- US Dollar in Consolidation
- US Treasury Bond in Bump Phase
- Gold Forming Ascending Broadening Wedge
- Silver Forming Ascending Broadening Wedge
- Crude Oil Forming 6-Month Bump and Run Reversal Bottom
- Asset Class Performance Ranking with U.S. Dollar Leading
Broad Market in Short-Term Bearish Time-Window
The daily chart below has the Wilshire 5000 index with both the BIX and the Momentum indicators. The current market status is summarized as follows:
Sector Performance Ranking with Home Construction Sector Leading
The following table is the percentage change of sectors and major market indexes against the 89-day exponential moving average (EMA89). The Wilshire 5000 index, as an average or a benchmark of the total market, is 3.28% above the EMA89. Outperforming sectors are Home Construction (8.94%), Wireless Communication (8.15%), and Internet (7.41%). Underperforming sectors are Oil Equipment (-4.39%), Energy (-3.16%), and Utilities (-2.30%).
S&P 500 Index in Primary Impulse Wave 5
From early December to late January, the SPX 500 index was in a flat correction with intermediate corrective wave (2) having minor wave a–b–c sub-wave sequence. Now the S&P 500 index is in intermediate wave (3). Wave (3) should contain 1–2–3–4–5 minor sub-wave sequence. Last week minor wave 1 ended, and minor wave 2 just started. Minor wave 2 is a short-term corrective wave.
German DAX Index: Elliott Wave
The index also developed an 1-year broadening wedge pattern. Since wave (2) did not reach the lower boundary of the wedge, it formed a partial decline which has a bullish indication for a potential upward breakout of the wedge. Recently prices broke above the upper boundary of the wedge. This breakout is a very bull sign for intermediate wave (3).
India Bombay Stock Exchange Index in Bump Phase
1) A lead-in phase in which a lead-in trend line connecting the lows has a slope angle of about 30 degrees. Prices move in an orderly manner and the range of price oscillation defines the lead-in height between the lead-in trend line and the first parallel line.
2) A bump phase where, after prices cross above the first parallel line, excessive speculation kicks in and the bump phase starts with fast rising prices following a sharp trend line slope with 45 degrees or more until prices reach a bump height with at least twice the lead-in height. Once the second parallel line gets crossed over, it serves as a sell line.
3) A run phase in which prices break support from the lead-in trend line in a downhill run.
Since March of 2014, the Bombay index has been in the Bump phase with a sharp trendline as excessive speculation drives prices up steeply. The index maintained above the 2nd Parallel Line. The uptrend continues as long as prices stay above the Bump Trendline.
Shanghai Composite Index: Long-Term Picture
Primary wave [1] contains an intermediate (1)–(2)–(3)–(4)–(5) five-wave sequence. Now the Shanghai index is in intermediate wave (4) for a correction with a potential 30%-60% retracement of wave (3).
Major Global Market Performance Ranking
US Dollar in Consolidation
US Treasury Bond in Bump Phase
Gold Forming Ascending Broadening Wedge
Silver Forming Ascending Broadening Wedge
Crude Oil in 6-Month Bump and Run Reversal Bottom Pattern
Asset Class Performance Ranking with U.S. Dollor Leading
The following table is the percentage change of each asset class (in ETFs) against the 89-day exponential moving average (EMA89). Currently U.S. Dollor is outperforming and crude oil is underperforming.