09/10/2017 – Market Update
Market Volatility Needs to be Watched Closely
Readings of the Broad Market Instability Index (BIX) went up again last week but the index is still below the panic threshold level. The Wilshire 5000 index is above the 89-day exponential moving average, and the momentum is positive. The broad stock market is projected to be in a short-term bullish time-window until 9/12/2017.
Table of Contents
- Broad Market in Short-Term Bullish Time-Window
- Sector Performance Ranking with Biotech Sector Leading
- S&P 500 Index in Primary Corrective Wave B
- German DAX Index: Elliott Wave
- India Bombay Index Forming 5-Week Trading Range
- Shanghai Composite Index: Intermediate-Term Pictures
- Major Global Markets Performance Ranking
- US Treasury Bond in Bullish 6-Month Uptrend Channel Pattern
- US Dollar Forming 6-Month Bearish Downtrend Channel Pattern
- Gold Bullish Breakout from 6-Month Horizontal Trading Range
- Silver Reached Price Target 17.9
- Crude Oil Forming 3-Month Symmetrical Triangle
- Asset Class Performance Ranking with Copper Leading Leading
Broad Market in Short-Term Bullish Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 39 on Friday 9/8/2017 (up from 8 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 9/12/2017. (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: peak
Date of Next Cycle High: 9/12/2017
Broad Market Instability Index (BIX): 39, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)
Sector Performance Ranking with Biotech 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 1.08% above the EMA89. Outperforming sectors are Biotech (11.00%), Precious Metals (8.16%), and Health Care (5.02%). Underperforming sectors are Telecommunication (-4.97%), Oil Equipment (-4.27%), and Banks (-3.63%).
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 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. Upward intermediate wave (C) has ended. Downward primary wave [C] has started and it should be going to have an intermediate (1)–(2)–(3)–(4)–(5) five-wave sequence. Currently it is in downward intermediate wave (1) that is just the first downward wave of the intermediate five-wave sequence.
India Bombay Index Forming 5-Week Trading Range
The India Bombay Stock Exchange 30 Sensex index is forming a 5-week horizontal trading range between 31200 and 31900. If prices break above the upper resistance of the channel, the upside price target would be projected at 32500.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index is forming a 4-month ascending broadening wedge. The index is bullish as long as prices stay above the lower boundary of the wedge.
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 Japanese market is underperforming.
US Treasury Bond in Bullish 6-Month Uptrend Channel Pattern
The 30-year U.S. treasury bond index formed a 6-month uptrend channel pattern. The index is bullish as long as prices stay above the lower boundary of the channel.
US Dollar Forming 6-Month Bearish Downtrend Channel
The U.S. dollar index is forming a 6-month bearish downtrend channel. The index is bearish as long as prices stay below the upper boundary of the channel.
Gold Had Bullish Breakout from 6-Month Horizontal Trading Range
The gold index formed a 6-month horizontal trading range between 1200 and 1300. Prices have broken above the upper resistance level. The upside price target was projected at 1385.
Silver Reached Price Target 17.9
The silver index formed a 2-month inverse head-and-shoulders pattern. Prices have broken above the neckline. It is bullish with an upside price target projected at 17.9. This target was reached last week.
Crude Oil Forming 3-Month Symmetrical Triangle
Crude oil index is forming a 3-month symmetrical triangle pattern. It is neutral before prices break out from the triangle..
Asset Class Performance Ranking with Copper Leading
The following table is the percentage change of each asset class (in ETFs) against the 89-day exponential moving average (EMA89). Currently copper is outperforming and US dollar is underperforming.
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