Home > News > 09/04/2016 – Market Update

09/04/2016 – Market Update

September 5, 2016 Leave a comment Go to comments

 

Extended Sideways Market

 

The SPX was still trapped in a horizontal narrow trading range, and was unable to break below the lower boundary of the range last week. We have mixed market singles with a bullish reading in the Broad Market Instability index and a bearish reading in the market momentum. The broad stock market is projected to be in a short-term neutral time-window until 9/9/2016.

 
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 9-2-2016

 

The LWX Indicator in Next Four Weeks (Forecast)
Next 4 wks LWX 9-2-2016

 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 8 on Friday 9/2/2016 (one change from 8 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 projected to be in a short-term neutral time-window until 9/9/2016 (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: upward
Date of Next Cycle High: 9/20/2016
Broad Market Instability Index (BIX): 8, below the panic threshold (bullish)
Momentum Indicator: negative (bearish)

 
W5000 9-2-2016

 
Sector Performance Ranking with Semiconductors 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 2.91% above the EMA89. Outperforming sectors are Semiconductors (9.31%), Wireless Communication (8.38%), and Internet (6.09%). Underperforming sectors are Pharmaceuticals (-1.31%), Utilities (-1.24%), and Telecommunication (0.03%).
 
Sector 9-2-2016


 
S&P 500 Index in Primary Wave Y


 

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

Now downward intermediate wave (A) of primary wave [Y] just started.

 
SPX 9-2-2016

 
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] had an intermediate (1)(2)(3)(4)(5) five-wave sequence. Now the index is in upward primary wave [B] with upward intermediate wave (A). Downward intermediate wave (B) will be the next.

 
DAX 9-2-2016 (Weekly)
 

India Bombay Stock Exchange Index in 7-month rising wedge pattern


 

The India Bombay Stock Exchange 30 Sensex index has formed a 7-month rising wedge pattern. Now prices bounced off the lower boundary of the wedge.

 
BSE 9-2-2016
 

Shanghai Composite Index: Intermediate-Term Pictures


 

Since last June, downward intermediate wave (A) has developed a falling wedge on the Shanghai Stock Exchange Composite index with a 12345 sub-wave sequence. Sub-wave 5 is the last downward wave of intermediate wave (A). Once wave (A) ends, upward intermediate wave (B) starts.

Currently prices are testing the upper boundary of the 6-month ascending triangle pattern. If prices can hold above the upper boundary, the upside price target is projected at 3440.

 
SSEC 9-2-2016


 
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, and the Australia market is underperforming.
 
Global Markets 9-2-2016


 
US Dollar in 19-Month Horizontal Channel


 

In the following weekly chart, the U.S. dollar has formed an 19-month horizontal channel. The dollar is neutral in a trading range between 93 and 100 before prices break out from the channel.

 
USD 9-2-2016

 
US Treasury Bond in 10-Month Bullish Uptrend Channel


 

The 30-year U.S. treasury bond index is forming a 10-month bullish uptrend channel. Currently it is in a downward swing inside the channel.

 
USB 9-2-2016

 
Gold Formed 7-month Rising Wedge Pattern


 

The gold index is forming a 7-month rising wedge. Prices are confined in the wedge before the next breakout. Last week the index just bounced off the lower boundary of the wedge.

 
GOLD 9-2-2016
 
Silver Still in Sideways


 

After it stayed below the 7-week horizontal channel for about two weeks, the silver index moved up again to retest the upper boundary of the channel. Prices most likely will return into the channel towards the upper horizontal boundary.

 
Silver 9-2-2016
 
Crude Oil Forming 5-Month Symmetrical Triangle Pattern


 

The crude oil is forming a 5-month symmetrical triangle pattern with prices confined between two converging boundaries. Currently the index is in a downward swing towards the lower boundary.

 
Oil 9-2-2016

 
Asset Class Performance Ranking with Equity Leading


 

The following table is the percentage change of each asset class (in ETFs) against the 89-day exponential moving average (EMA89). Currently equity is outperforming and crude oil is underperforming.
 
Asset 9-2-2016
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