05/28/2017 – Market Update
A Short Bullish Time-Window
The broad stock market is projected to be in a short-term bullish time-window until 6/8/2017. However this market may have a reversal early any time from now.
Table of Contents
- Broad Market in Short-Term Bullish Time-Window
- Sector Performance Ranking with Semiconductor Sector Leading
- S&P 500 Index in Primary Corrective Wave C
- German DAX Index: Elliott Wave
- India Bombay Index Forming 4-Month Bullish Uptrend Channel
- Shanghai Composite Index: Intermediate-Term Pictures
- Major Global Markets Performance Ranking
- US Treasury Bond Forming 6-Month Broadening Wedge Pattern
- US Dollar Bearish Below 6-Month Falling Wedge
- Gold Forming 5-Month Ascending Broadening Pattern
- Silver forming 4-month descending triangle Pattern
- Crude Oil Forming 5-Month Descending Broadening Wedge
- Asset Class Performance Ranking with Equity Leading
Broad Market in Short-Term Bullish Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 25 on Friday 5/26/2017 (down from 49 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 bullish time-window until 6/8/2017. (see the second table below).
The LWX Indicator in Last Four Weeks (Actual)
The LWX Indicator in Next Four Weeks (Forecast)
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: 6/8/2017
Broad Market Instability Index (BIX): 25, 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 2.63% above the EMA89. Outperforming sectors are Semiconductors (8.06%), Technology (7.16%), and Internet (6.98%). Underperforming sectors are Oil Equipment (-8.01%), Energy (-4.82%), and Telecommunication (-4.35%).
S&P 500 Index Starting Primary Wave C
The following chart is a 3-year weekly chart of the S&P index. The SPX has formed a potential expended flat pattern with [A]–[B]–[C] primary corrective waves. Upward wave [B] becomes an over 1-year uptrend channel with (A)–(B)–(C) intermediate waves, and it runs beyond the beginning of downward wave [A] as an expanded flat.
Intermediate upward wave (C) is ending, and downward intermediate wave (1) is starting which is the beginning of downward primary wave [C]. The intermediate-term downside price target for wave (1) is projected around 2325 near the lower boundary of the channel.
Intermediate upward wave (C) is ending, and downward intermediate wave (1) is starting which is the beginning of downward primary wave [C]. The intermediate-term downside price target for wave (1) is projected around 2325 near the lower boundary of the channel.
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. Upward primary wave [B] has developed with (A)–(B)–(C) intermediate waves. And now upward intermediate wave (C) is ending. Downward primary wave [C] will be the next.
India Bombay Index Forming 4-Month Bullish Uptrend Channel
The India Bombay Stock Exchange 30 Sensex index is forming a 4-month bullish uptrend channel. The index approaches the upper boundary of the channel.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index has formed a 6-month double-top pattern. Prices are testing the neckline. If prices break below 3100, the downside price target is projected at 2950.
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 Indian market is outperforming, and the Russian market is underperforming.
US Treasury Bond Forming 6-Month Broadening Wedge Pattern
The 30-year U.S. treasury bond index is forming a 6-month broadening wedge pattern. It recently also formed a partial decline which is a potential bullish pattern to break out from the upper boundary of the wedge.
US Dollar Bearish Below 6-Month Falling Wedge
The U.S. dollar index formed a 6-month falling wedge pattern. Recently prices have broken below the lower boundary of the wedge. Although a downside price target was projected at 96.35, prices bounced off 96.75. The index may move up to retest the lower boundary of the wedge.
Gold Forming 5-Month Ascending Broadening Pattern
The gold index is forming a 5-month ascending broadening wedge pattern. After prices found a support at the lower boundary of the wedge, the index bounced sharply. But it is a bit of a challenge to reach the upper boundary of the wedge without a consolidation or pullback.
Silver forming 4-month descending triangle Pattern
The silver index is forming a 4-month descending triangle pattern. After prices found a support at the lower boundary of the wedge, the index bounced sharply. But it is a bit of a challenge to reach the upper boundary of the triangle without a consolidation or pullback.
Crude Oil Forming 5-Month Descending Broadening Wedge
Crude oil index is forming a 5-month descending broadening wedge pattern. It is very volatile inside the wedge. The index will become bullish if the it forms a partial decline.
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.
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