The S&P 500 index extended a tight trading range last week while momentum became negative. Prices of gold and treasury bonds turned up sharply. The broad stock market is projected to be in a short-term bearish time-window until 8/5/2016.

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 16 on Friday 7/29/2016 (up from 2 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 negative. Based on the forecast of LWX, the broad stock market is in a short-term bearish time-window until 8/5/2016 (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:

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 4.29% above the EMA89. Outperforming sectors are Precious Metals (20.33%), Wireless Communication (13.47%), and Semiconductors (10.69%). Underperforming sectors are Banks (1.22%), Energy (1.25%), and Consumer Services (2.87%).
 

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] as a flat correction with an intermediate (A)–(B)–(C) sub-wave structure.

Upward primary wave [X] started in mid-February. 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].

Since early April, wave [X] has formed a 3-month broadening triangle pattern with a series of higher highs and lower lows as a,b,c,d,and e marked on the chart. Recently prices have broke above the upper boundary of the broadening triangle. Although the upside price target may be projected at 2210, the performance of this breakout could be poor according to Thomas Bulkowski. The break even failure rate is high and the average rise is meager.

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 still in intermediate wave (4). The index is also in an 18-month bearish downtrend channel.

In the weekly chart, the India Bombay Stock Exchange 30 Sensex index has broke above the upper boundary of an 18-month descending broadening wedge pattern. Based on this breakout, the upside price target is projected at 29500.

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) starts.

Now the index is forming a 6-month ascending triangle pattern. Prices are pulling back from the upper horizontal boundary of the triangle.

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, and the Chinese market is underperforming.
 

In the following weekly chart, the U.S. dollar has formed an 18-month horizontal channel. The dollar is neutral in a trading range between 93 and 100 before prices break out from the channel.

The 30-year U.S. treasury bond index is forming a 9-month bullish uptrend 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 6-month broadening ascending right-triangle pattern. Prices typically have large swings inside the triangle before the next breakout.

The silver index is forming a 4-week horizontal channel between 19.25 and 20.50. It is neutral before the next breakout from the trading range.

Last week crude oil broken below the lower boundary of a 7-week downtrend channel. The parallel line of the downtrend channel could be a support.

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.