Home > News > 03/06/2016 – Market Update

03/06/2016 – Market Update

 

S&P 500 Index Approaches Upside Resistance

 

Last week the crude oil price breached the upper boundary of a falling wedge pattern, and this could be a bullish sign for crude oil. The stock market continues drifting up as the S&P 500 index approaches the upside resistance near 2010. 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 3/11/2016.

 

Table of Contents


 


 
Broad Market Going to Turn into 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 3-4-2016

 

The LWX Indicator in Next Four Weeks (Forecast)
Next 4 wks LWX 3-4-2016

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 4 on Friday 3/4/2016 (down from 10 the previous week) which is below the panic threshold level of 42 and indicates a bullish market. The Wilshire 5000 index is above the 89-day exponential moving average, and the momentum is positive. Based on the forecast of LWX, the broad stock market is in a short-term neutral time-window until 3/11/2016 (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: peak
Date of Next Cycle low: 3/23/2016
Broad Market Instability Index (BIX): 4, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)

 

W5000 3-4-2016


 
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 1.34% above the EMA89. Outperforming sectors are Precious Metals (24.66%), Telecommunication (7.58%), and Utilities (5.56%). Underperforming sectors are Biotech (-6.85%), Banks (-2.38%), and Healthcare (-1.85%).
 
Sector 3-4-2016

 

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 upward intermediate wave (4) inside downward primary wave [A]. Intermediate wave (4) is a bear market rally, and will contain a-b-c sub-waves. Now it is in upward sub-wave a (blue). There is an upside resistance around 2010 near the downtrend line. Downward sub-wave b will be the next.

 

SPX 3-4-2016

 

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 upward intermediate wave (4).

 

DAX 3-4-2016 (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 3-4-2016 (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.

 

SSEC 3-4-2016 (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 Brazilian market is outperforming. The Chinese market is underperforming.
 
Global Markets 3-4-2016

 

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 3-4-2016 (Weekly)

 

US Treasury Bond Forming 9-Month Broadening Wedge


 

After an explosive advance, the 30-year U.S. treasury bond index is forming a 9-month broadening wedge pattern. Prices typically have large swings inside the wedge.

 

USB 3-4-2016

 

Gold Upside Price Target 1300


 

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 3-4-2016 (Weekly)

 

Silver in 3-Month Bullish Uptrend Channel


 

After it broke out from an inverted head-and-shoulders pattern, the silver index has formed a 3-month bullish uptrend channel.

 

Silver 3-4-2016

 

Crude Oil Price Breached Upper Boundary of Falling Wedge


 

Crude oil formed a 16-month falling wedge pattern. Last week prices broke above the upper boundary of the wedge. This breakout is a bull sign for the crude oil. But we will see if prices can stay above the upper boundary of the wedge.

 

Oil 3-4-2016

 

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 3-4-2016

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