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06/04/2017 – Market Update

June 5, 2017 Leave a comment Go to comments

 

Stocks Bullish ahead of UK Election

 

The S&P, Dow, and Nasdaq post record close last week. The broad stock market is projected to be in a short-term bullish time-window until 6/8/2017 which is coincident with the date of the UK general election this year. The outcome of the election would impact the market volatility.

 
Table of Contents

 

 

 
Broad Market in Short-Term Bullish Time-Window

 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 12 on Friday 6/2/2017 (down from 25 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): 12, 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 3.34% above the EMA89. Outperforming sectors are Semiconductors (9.06%), Technology (7.88%), and Internet (7.82%). Underperforming sectors are Oil Equipment (-8.72%), Energy (-6.57%), and Banks (-2.32%).
 

 

 
S&P 500 Index in Primary Wave B

 

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.

The market still pushes intermediate upward wave (C) up. Now the 15-month-long upward primary wave [B] becomes a rising wedge. It is bullish as long as prices stay above the lower boundary of the wedge, except a bearish bias for a potential downward breakout.

 


 
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. Now prices are going to test 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. Prices tried to bounce one week ago, but the selloff last week pulled down the price towards the downside price target of 96.35.

 


 
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 prices can form a partial decline above the lower boundary of the wedge.

 


 
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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