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09/25/2016 – Market Update
September 26, 2016
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Sideways Trend
The S&P 500 index bounced off the 89-day exponential moving average last week. The stock market is still in a sideways trend before the next breakout. The broad stock market is projected to be in a short-term neutral time-window until 9/26/2016 and thereafter a bullish time-window.
Table of Contents
- Broad Market Turning into Short-Term Bullish Time-Window
- Sector Performance Ranking with Semiconductors Sector Leading
- S&P 500 Index in Primary Corrective Wave Y
- German DAX Index: Elliott Wave
- India Bombay Stock Exchange Index in 8-month rising wedge pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- Major Global Markets Performance Ranking
- US Dollar in 20-Month Horizontal Channel
- US Treasury Bond Forming 16-Month Ascending Broadening Wedge
- Gold Formed 8-month Rising Wedge Pattern
- Silver Forming 11-Week Horizontal Channel
- Crude Oil Forming 6-Month Symmetrical Triangle Pattern
- Asset Class Performance Ranking with Gold Leading
Broad Market Turning into Short-Term Bullish 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)
The LWX Indicator in Next Four Weeks (Forecast)
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 6 on Friday 9/23/2016 (down from 47 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 projected to be in a short-term neutral time-window until 9/26/2016 and thereafter a bullish time-window. (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 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: 10/6/2016
Broad Market Instability Index (BIX): 6, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)
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 1.87% above the EMA89. Outperforming sectors are Semiconductors (6.90%), Internet (5.79%), and Wireless Communication (5.48%). Underperforming sectors are Home Construction (-3.24%), Energy (-0.92%), and Consumer Goods (-0.28%).
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].
Currently the SPX is in downward primary wave [Y] and it will have an intermediate corrective (A)–(B)–(C) wave sequence. Now it is in downward intermediate wave (A).
Intermediate wave (A) will have 1–2–3–4–5 sub-waves. Current upward sub-wave 2 could be a sideways market.
Currently the SPX is in downward primary wave [Y] and it will have an intermediate corrective (A)–(B)–(C) wave sequence. Now it is in downward intermediate wave (A).
Intermediate wave (A) will have 1–2–3–4–5 sub-waves. Current upward sub-wave 2 could be a sideways market.
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. Currently the index is in upward primary wave [B] which will have (A)–(B)–(C) intermediate waves. Now it is in downward intermediate wave (B) and it could be a sideways market.
India Bombay Stock Exchange Index in 8-month rising wedge pattern
The India Bombay Stock Exchange 30 Sensex index has formed an 8-month rising wedge pattern. Prices are confined inside the wedge before a breakout.
Shanghai Composite Index: Intermediate-Term Pictures
Since the middle of last year, 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.
Currently the index is in a bottoming process and prices are still confined in an 8-month ascending triangle pattern. The lower boundary of the triangle pattern would be a support to test.
Currently the index is in a bottoming process and prices are still confined in an 8-month ascending triangle pattern. The lower boundary of the triangle pattern would be a support to test.
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 Chinese market is underperforming.
US Dollar in 20-Month Horizontal Channel
In the following weekly chart, the U.S. dollar has formed a 20-month horizontal channel. The dollar is neutral in a trading range between 93 and 100 before prices break out from the channel.
US Treasury Bond Forming 16-Month Ascending Broadening Wedge
The 30-year U.S. treasury bond index is forming a 16-month ascending broadening wedge pattern. The lower boundary of the wedge would get tested.
Gold Forming 8-month Rising Wedge Pattern
The gold index is forming an 8-month rising wedge. Prices are confined in the wedge before the next breakout. Prices bounced off the lower boundary of the wedge.
Silver Forming 11-Week Horizontal Channel
The silver index is forming an 11-week horizontal channel between 18.50 and 20.75. It is neutral before prices break out from the channel.
Crude Oil Forming 6-Month Symmetrical Triangle Pattern
The crude oil is forming a 6-month symmetrical triangle pattern with prices confined between two converging boundaries.
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.
