Home > News > 09/25/2016 – Market Update

09/25/2016 – Market Update

September 26, 2016 Leave a comment Go to comments

 

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


 

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-9-23-2016

 

The LWX Indicator in Next Four Weeks (Forecast)
next-4-wks-lwx-9-23-2016

 

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:

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)

 
w5000-9-23-2016

 
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 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%).
 
sector-9-23-2016


 
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].

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 12345 sub-waves. Current upward sub-wave 2 could be a sideways market.

 
spx-9-23-2016

 
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. 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.

 
dax-9-23-2016-weekly
 

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.

 
bse-9-23-2016
 

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 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 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.

 
ssec-9-23-2016


 
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 Chinese market is underperforming.
 
global-markets-9-23-2016


 
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.

 
usd-9-23-2016

 
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.

 
usb-9-23-2016

 
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.

 
gold-9-23-2016
 
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.

 
silver-9-23-2016
 
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.

 
oil-9-23-2016

 
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-9-23-2016
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