Home > News > 08/11/2019 – Market Update

08/11/2019 – Market Update

 

US Treasury Bonds and Gold Rocketed Higher

 

The flight to safety pushed the 30-year US treasury bond to a 2.5-year high and gold to a 6-year high last week. The stock market was on a roller coaster ride as readings of our Broad Market Instability Index stayed above the panic threshold level. The S&P 500 index is in an intermediate downward wave. The broad stock market is projected to be in a short-term bearish time-window until 8/15/2019.

 
Table of Contents


 

 

Broad Market in Short-Term Bearish Time-Window


 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 143 on Friday 8/9/2019 (up from 121 the previous week) which is above the panic threshold level of 42 and indicates a bearish market. The Wilshire 5000 index is slightly below the 89-day exponential moving average, and the momentum is negative. Based on the forecast of the Leading Wave Index (LWX), the broad stock market is projected to be in a short-term bearish time-window until 8/15/2019.

 

The Leading Wave Index (LWX) Indicator in Last Four Weeks (Actual)

 

The Leading Wave Index (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: downward
Date of Next Cycle Low: 8/15/2019
Broad Market Instability Index (BIX): 143, above the panic threshold (bearish)
Momentum Indicator: negative (bearish)

 

 
Sector Performance Ranking with Precious Metals Sector Leading


 

The following table ranks sectors by using the StockCharts Technical Rank (SCTR) based on six key indicators which cover long-term, medium-term and short-term timeframes. Outperforming sectors are Precious Metals, Home Construction, and Real Estate. Underperforming sectors are Oil Equipment, Energy, and Pharmaceuticals.

 

 

 
S&P 500 Index in Primary Downward Wave W


 

As shown in the weekly chart below, since early 2016 the SPX has been in primary impulse wave [5] which is the last upward wave of a multi-year primary five-wave sequence started from 2009. This fifth primary upward wave developed an intermediate (1)(2)(3)(4)(5) five-wave sequence. Both intermediate upward wave (5) and primary upward wave [5] ended in last October, and primary corrective wave [W][X][Y] sequence started right after.

Currently the SPX is in primary corrective wave [W] which is the first primary downward wave of the primary corrective wave [W][X][Y] sequence. This downward wave [W] is going to have an intermediate (W)(X)(Y) three-wave sequence progressively to the downside. So far intermediate waves (W) and (X) have developed. Now it is in downward intermediate wave (Y) which will have a sub-wave a-b-c sequence.

 

The S&P 500 index on daily chart below is forming a 7-month rising wedge pattern with a sub-wave a-b-c sequence of intermediate wave (X). Last week the price broke below the lower boundary, and quickly reached the downside price target 2825. Then it became neutral as the price retraced back into the wedge.

 


 
German DAX Index: Elliott Wave


 

In the following weekly chart, since early 2018 the German DAX index has been in primary downward wave [W] which will have an intermediate (W)(X)(Y) three-wave sequence progressively to the downside. So far intermediate wave (W) and wave (X) have developed. Now it is in downward intermediate wave (Y).

 


 
India Bombay Index Forming 2-Month Falling Wedge Pattern


 

The India Bombay Stock Exchange 30 Sensex index is forming a 2-month falling wedge pattern. It is neutral before the price breaks out from the wedge.

 


 
Shanghai Composite Index: Intermediate-Term Pictures


 

The Shanghai Stock Exchange Composite index formed a 3-month broadening triangle pattern. It is neutral before the price breaks out from the triangle. Now the price is testing the lower boundary of the wedge. If it breaks down, a downside price target would be projected at 2450.

 

In the following weekly chart, the Shanghai Stock Exchange Composite index formed a 21-month descending broadening wedge pattern. It is neutral before the price breaks out from the triangle.

 


 
US Treasury Bond Forming 4-Month uptrend channel pattern


 

The 30-year U.S. treasury bond index is forming a 4-month uptrend channel pattern. It is bullish as long as the price stays above the lower boundary of the channel.

 


 
US Dollar Forming 2-Month Ascending Broadening Wedge Pattern


 

The U.S. dollar index is forming 2-month ascending broadening wedge pattern. It is neutral before the price breaks out from the wedge. Now the price is testing the lower boundary of the wedge. If it breaks down, a downside price target would be projected at 95.4.

 


 
Gold Broke above 3.5-Year Ascending Triangle Pattern


 

The gold index formed a 3.5-year ascending triangle pattern on the weekly chart. The price has recently broken above the upper boundary of the triangle. It is bullish with an upside price target projected at 1570, as long as the price stays above the upper boundary of the triangle.

 

 
Silver Forming 2-Month Ascending Broadening Wedge Pattern


 

The silver index is forming a 2-month ascending broadening wedge pattern. It is neutral before the price breaks out from the wedge.

 

 
Crude Oil Forming 3-Month Descending Triangle Pattern


 

The crude oil index is forming a 3-month descending triangle pattern. It is neutral before the price breaks out from the wedge.

 


 
Asset Class Performance Ranking with US Treasury Bond Leading


 

The following table ranks asset class by using the StockCharts Technical Rank (SCTR) based on six key indicators which cover long-term, medium-term and short-term timeframes. Currently the US Treasury Bond is outperforming and crude oil is underperforming.

 

  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s