The Brexit result sent the general stock market sharply lower last week. The Broad Market Instability Index surged above the panic threshold. The S&P 500 index failed to make a new high, and resumed its intermediate downward wave. The fast price decline will end short-term downward wave 1 soon, and a bounce with short-term upward wave 2 will be the next. A massive flight to safety pushed gold, silver and treasury bonds higher, but prices are testing their respective overhead resistance levels. The Chinese stock market is in an interesting bottoming process. The broad stock market is projected to be in a short-term bearish time-window until 6/27/2016.

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 Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 67 on Friday 6/24/2016 (up from 18 the previous week) which is 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 negative. Based on the forecast of LWX, the broad stock market is in a short-term bearish time-window until 6/27/2016. A short-term neutral time-window will be the next. (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:

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 0.66% below the EMA89. Outperforming sectors are Precious Metals (18.27%), Telecommunication (5.81%), and Utilities (4.42%). Underperforming sectors are Biotech (-7.39%), Banks (-5.92%), and Financials (-2.86%).
 

The SPX since last August has been in a bear market with a complicate correction, potentially in a combination of complex corrective primary waves [W]–[X]–[Y]. From last August to February this year, the S&P 500 index was in corrective primary wave [W] that finished in a flat correction with an intermediate (A)–(B)–(C) sub-wave structure.

Since mid-February, upward primary wave [X] has developed. Wave [X] typically is just a wave inside the complex W-X-Y wave structure to link two corrective sequences. The next wave after wave [X] will be primary wave [Y] that should be a major downward wave as a zigzag correction, and it would be more dramatic than the flat correction of wave [W].

Currently downward primary wave [Y] has started. Wave [Y] will be divided to (A)–(B)–(C) intermediate sub-waves. Now it is in downward intermediate wave (A) which will have an 1-2-3-4-5 sub-wave sequence. Downward sub-wave 1 nears the end, and upward sub-wave 2 will be the next.

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. Currently it is in downward intermediate wave (5). The index is also in a 17-month bearish downtrend channel.

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. Since then, it has developed a descending broadening wedge. Now prices are testing the upper boundary of the wedge.

Since last June, downward intermediate wave (A) has developed a falling wedge on the Shanghai Stock Exchange Composite index with a 1–2–3–4–5 sub-wave sequence. Sub-wave 5 is the last downward wave of intermediate wave (A). Once wave (A) ends, upward intermediate wave (B) will start.

Prices have breached the upper boundary of the 12-month falling wedge. Now the index is forming a 4-month symmetrical triangle with higher lows and lower highs. This could be a pattern for a bottom process. Once prices break above the upper boundary of the triangle, upward intermediate wave (B) will resume. Wave (B) is expected to be a big upward wave, and it would retrace about 30%-70% of the amount of wave (A). The upside price target is projected at 3650.

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

In the following weekly chart, the U.S. dollar is forming a Bump-and-Run Reversal Top pattern. Early this year prices broke below the bump trendline which is a sell signal for the dollar. Since then, prices has declined. After the index found a short-term support at the first parallel line recently, prices have been in consolidation.

The 30-year U.S. treasury bond index is forming a 13-month uptrend channel. Currently prices swing up towards the upper boundary of the channel.

After it broke above the upper boundary of an 1-year falling wedge pattern on the weekly chart, the gold index advanced explosively. Then it has formed a 5-month broadening ascending right-triangle pattern. Now prices are testing the upper boundary of the triangle. If prices fail to break above the upper boundary, a sharp swing would be triggered towards the lower horizontal boundary of the triangle.

The silver index is forming a 3-month ascending triangle pattern. Prices are testing the upper horizontal boundary of the triangle. If prices fail to break above the upper boundary, a sharp swing would be triggered towards the lower boundary of the triangle.

Crude oil has formed a 5-month rising wedge. It will swing inside the wedge before the next breakout. Now prices are testing the lower boundary of the wedge.

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 equity is underperforming.