Home > News > 02/14/2016 – Market Update

02/14/2016 – Market Update

February 15, 2016 Leave a comment Go to comments

 

US Bonds and Gold Gain on Stock Turmoil

 

Gold/silver and the 30-year US treasury bond have advanced sharply on a flight to safety as the stock market turmoil intensified. Last week, the 30-year US treasury bond reached our short-term upside price target of 165, and silver 15.4. Gold still has a price target at 1300. Based on the forecast of the Leading-Wave Index (LWX), the broad stock market is projected to be in a short-term neutral time-window until 2/23/2016.

 

Table of Contents


 

 

 
Broad Market in Short-Term Neutral Time-Window


 

The Leading-Wave Index (LWX) is Nu Yu’s proprietary leading indicator for US equity market. LWX>+1 indicates bullish (green); LWX< -1 indicates bearish (red); The LWX between +1 and -1 indicates neutral (yellow).

 

The LWX Indicator in Last Four Weeks (Actual)

Last 4 wks LWX 2-12-2016

The LWX Indicator in Next Four Weeks (Forecast)

Next 4 wks LWX 2-12-2016

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 46 on Friday 2/12/2016 (down from 85 the previous week) which is slightly above the panic threshold level of 42 and indicates a bearish market. The Wilshire 5000 index is below the 89-day exponential moving average, and the momentum is slightly negative. Based on the forecast of LWX, the broad stock market is in a short-term neutral time-window until 2/23/2016 (see the second table above).

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:

Short-Term Cycle: downward
Date of Next Cycle Low: 2/23/2016
Broad Market Instability Index (BIX): 46, above the panic threshold (bearish)
Momentum Indicator: negative (bearish)

 
W5000 2-12-2016

 

Sector Performance Ranking with Precious Metals 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 7.02% below the EMA89. Outperforming sectors are Precious Metals (28.46%), Telecommunication (4.72%), and Utilities (3.80%). Underperforming sectors are Oil Equipment (-13.96%), Internet (-13.48%), and Home Construction (-12.86%).
 
Sector 2-12-2016

 

S&P 500 Index in Primary Wave A


 

Since last August, the S&P 500 index has been in a bear market which will have a primary corrective [A][B][C] wave sequence in a relative long-term time-frame. Primary wave [A] is the first down leg of this bear market, and it should contain an intermediate (1)(2)(3)(4)(5) sub-wave structure. Currently it is in intermediate downward wave (3) inside primary wave [A].

Intermediate wave (3) is a relative big middle-term downward wave and it crossed below the August low in January. Wave (3) will have 1-2-3-4-5 sub-waves (blue). Currently, it is in downward sub-wave 5 (blue).

Once sub-wave 5 ends, downward intermediate wave (3) will end, and upward intermediate wave (4) will start.

 

SPX 2-12-2016

 

German DAX Index: Elliott Wave

In the following weekly chart, the German DAX index is in a primary corrective [A][B][C] wave sequence. Downward primary wave [A] should have an intermediate (1)(2)(3)(4)(5) five-wave sequence. Now it is in downward intermediate wave (3) of primary wave [A].

 

DAX 2-12-2016 (Weekly)
 

 
India Bombay Stock Exchange Index in Bump-and-Run Reversal Top Pattern


 

In the weekly chart, the India Bombay Stock Exchange 30 Sensex index formed a Bump-and-Run Reversal Top pattern. Early last year, the index broke below the bump trendline, and it signaled a bearish reversal. The downside price target is projected at 21000 near the Lead-in Trendline.

 

BSE 2-12-2016 (Weekly)
 

 
Shanghai Composite Index: Intermediate-Term Picture


 

The chart below is a weekly chart of the Shanghai Stock Exchange Composite index. Since the middle of last June, the Shanghai index has been in primary wave [2] which is a major correction. Primary wave [2] has an intermediate (A)(B)(C) corrective-wave sequence. It has completed intermediate wave (A) and wave (B). Currently it is in downward intermediate wave (C).

The Shanghai index also formed an 1-year Head-and-Shoulders top pattern, and broke below the neckline near the level of 3000. The downside price target is projected at 2000.

The Chinese stock market was closed last week.

 

SSEC 2-5-2016 (Weekly)

 

Major Global Market Performance Ranking


 

The table below is the percentage change of major global stock market indexes against the 89-day exponential moving average (EMA89). Currently the Canadian market is outperforming. The Japanese markets is underperforming.

Global Markets 2-12-2016

 

US Dollar in Bump-and-Run Reversal Top Pattern


 

In the following weekly chart, the U.S. dollar is forming a Bump-and-Run Reversal Top pattern. Recently prices broke below the bump trendline which is a sell signal for the dollar.

 

USD 2-12-2016 (Weekly)

 

US Treasury Bullish Breakout Price Target Reached


 

The 30-year U.S. treasury bond index has had an explosive advance after prices broke above the upper boundary of a 9-month symmetrical triangle pattern. This bullish breakout had an upside price target at 165. This price target was reached last week.

 

USB 2-12-2016

 

Gold Bullish Breakout from 1-Year Falling Wedge


 

After it broke above the upper boundary of an 1-year falling wedge pattern on the weekly chart, the gold index has advanced explosively. This bullish breakout has a projected upside price target at 1300.

 

GOLD 2-12-2016 (Weekly)

 

Silver Bullish Breakout Price Target Reached


 

The silver index formed a 3-month inverted head-and-shoulders pattern.  Recently it broke above the neckline of the pattern. This bullish breakout has a projected upside price target at 15.4. This price target was reached last week.

 

Silver 2-12-2016

 

Crude Oil Forming 16-Month Falling Wedge Pattern


 

Crude oil formed a 16-month falling wedge. Prices swing inside the wedge. Recently prices bounced off the lower boundary of the wedge. It is bearish until prices break above the upper boundary of the wedge.

 

Oil 2-12-2016

 

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 is outperforming and crude oil is underperforming.
 
Asset 2-12-2016

  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s