07/19/2015 – Market Update
Stock Markets Continue to Bounce Higher
Table of Contents
- Broad Market in Short-Term Bullish Time-Window
- Sector Performance Ranking with Internet Sector Leading
- S&P 500 Index in Primary Impulse Wave 5
- German DAX Index: Elliott Wave
- India Bombay Stock Exchange Index in Bump-and-Run Reversal Top Pattern
- Shanghai Composite Index: Intermediate-Term Picture
- Major Global Markets Performance Ranking
- US Dollar in Bump-and-Run Reversal Top Pattern
- US Treasury Bond Bearish Below 9-Month Ascending Broadening Wedge
- Gold Bearish Breaking below 6-Month Descending Triangle
- Silver Forming 6-Month Bearish Downtrend Channel
- Crude Oil Broke Below 2-Month Horizontal Channel
- Asset Class Performance Ranking with US Dollar Leading
Broad Market in Short-Term Bullish 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 Internet 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 1.45% above the EMA89. Outperforming sectors are Internet (8.78%), Biotech (7.73%), and Banks (5.24%). Underperforming sectors are Precious Metals (-18.22%), Oil Equipment (-7.55%), and Energy (-6.87%).
S&P 500 Index in Primary Impulse Wave 5
Primary wave [5] has been confined in a rising wedge for over 7 months. This rising wedge is also characterized as a Ending Diagonal. Since the beginning of March, it has been in corrective intermediate wave (4) with a flat correction combining three a-b-c corrective wave sequences. Now it is in upward intermediate wave (5).
For more information about the ending diagonal, visit: “Ending Diagonal: A Pattern That Sends Shivers Down Investors’ Spines” at Elliott Wave International.
German DAX Index: Elliott Wave
India Bombay Stock Exchange Index in Bump-and-Run Reversal Top Pattern
Shanghai Composite Index: Intermediate-Term Picture
Currently the Shanghai index is in primary wave [2] which is a major correction. Primary wave [2] has an intermediate (A)–(B)–(C) corrective-wave sequence. One week ago, downward intermediate wave (A) ended after it reached our downside price target of 3600 and overshot to 3400.
Upward intermediate wave (B) has started for a powerful bounce. This bounce could continue until 7/27/2015. The upside price target for wave (B) is projected at 4300 based on a typical 50% retracement of wave (A). Please keep in mind that a retracement range of 38%-62% also is possible for a price range between 4100 and 4500.
In additional, the Shanghai index formed a bearish 7-month ascending broadening wedge pattern. In nature, wave (B) attempts to reach the top boundary of the wedge if it can. But the huge distance from the current level to the top needs a tremendous of money to push, in this case it needs about 4 trillion dollars based on the total Chinese market capital size. If wave (B) fails to reach the upper boundary of the wedge, a partial rising could be formed for indicating a high possibility that downward wave (C) will break below the lower boundary of the wedge.
Major Global Market Performance Ranking
US Dollar in Bump-and-Run Reversal Top Pattern
US Treasury Bearish Below 9-Month Ascending Broadening Wedge
Gold Bearish Breaking below 6-Month Descending Triangle
Silver Forming 6-Month Bearish Downtrend Channel
Crude Oil Bearish Below 2-Month Horizontal Channel
Asset Class Performance Ranking with US Dollar Leading