Archive

Archive for July 10, 2017

07/09/2017 – Market Update

July 10, 2017 Leave a comment

 

The US Dollar Might be Due for a Rebound

 

Last week the 30-year U.S. treasury bond, gold, and silver broke sharply downward corresponding to their technical patterns while the U.S. dollar was waiting for a rebound. Crude oil failed to continue its 2-week-long rally, and formed a bearish partial rising. The general stock market still traded in a narrow horizontal trading range as Home Construction, Banks, and Biotech sectors outperformed. The broad stock market is projected to be in a short-term bullish time-window until 7/24/2017.

 
Table of Contents

 

 

 
Broad Market Turning into Short-Term Bullish Time-Window

 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 14 on Friday 7/7/2017 (up from 9 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 bullish time-window until 7/24/2017. (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: 7/24/2017
Broad Market Instability Index (BIX): 14, below the panic threshold (bullish)
Momentum Indicator: negative (bearish)

 


 
Sector Performance Ranking with Home Construction 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 1.52% above the EMA89. Outperforming sectors are Home Construction (7.79%), Banks (5.52%), and Biotech (5.47%). Underperforming sectors are Oil Equipment (-8.34%), Precious Metals (-7.72%), and Telecommunication (-6.16%).
 

 

 
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 rising wedge with (A)–(B)–(C) intermediate waves, and it runs beyond the beginning of downward wave [A] as an expanded flat. The index is bullish as long as prices stay above the lower boundary of the 16-month-long rising 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 5-Month Bullish Uptrend Channel

 

The India Bombay Stock Exchange 30 Sensex index is forming a 5-month bullish uptrend channel. The index bounced off the lower boundary of the channel last week.

 


 
Shanghai Composite Index: Intermediate-Term Pictures

 

The Shanghai Stock Exchange Composite index is forming a 2-month rising wedge pattern. The index is bullish as long as prices stay above the lower boundary of the wedge, except a bearish bias for a potential downward breakout.

 


 
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 Broke Below 4-Month Rising Wedge Pattern

 

The 30-year U.S. treasury bond index formed a 4-month rising wedge pattern. Prices broke below the lower boundary of the wedge last week. It is bearish, and the downside price target is projected at 147.5.

 


 
US Dollar Forming 4-Month Falling Wedge Pattern

 

The U.S. dollar index is forming a 4-month falling wedge pattern. The index is bearish as long as prices stay below the upper boundary of the wedge, except a bullish bias for a potential upward breakout. Now it is testing the lower boundary of the wedge, and is due for a rebound.

 


 
Gold Broke Below 2.5-Month Ascending Triangle Pattern

 

The gold index formed a 2.5-month ascending triangle pattern. Prices broke below the lower boundary of the triangle last week. It is bearish, and the downside price target is projected at 1186.

 

 
Silver Broke Below 2.5-month Converging Triangle Pattern

 

The silver index formed a 2.5-month converging triangle pattern. Prices broke below the lower boundary of the triangle last week. It is bearish, and the downside price target is projected at 15.2. Prices briefly crossed below the price target last Friday.

 

 
Crude Oil Forming 6-Month Descending Broadening Wedge

 

Crude oil index is forming a 6-month descending broadening wedge pattern. It becomes very volatile inside the wedge. Prices ended a 2-week-long rally last week, and formed a partial rising. It is bearish, and prices will most likely retest 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.
 
%d bloggers like this: