The stock market started a short-term downward wave last week. As the market momentum went into the negative territory, readings of our Broad Market Instability index started to rise. The S&P 500 index is consolidating inside an ascending triangle pattern and waiting for a breakout. Gold and the 30-year US treasury bond still hold mid-term uptrend. The broad stock market is projected to be in a short-term bearish time-window until 10/9/2019.

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 24 on Friday 9/27/2019 (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 slightly above the 89-day exponential moving average, and the momentum is slightly 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 10/9/2019.

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:

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 Home Construction, Utilities, and Precious Metals. Underperforming sectors are Oil Equipment, Biotech, and Pharmaceuticals.

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. Currently 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 is forming a 4-month ascending triangle pattern. It is neutral before the price breaks out from the triangle.

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).

The India Bombay Stock Exchange 30 Sensex index formed a 2-month descending triangle pattern. The price has recently broken above the upper boundary of the triangle. It is bullish with an upside price target projected at 38600. This price target was reached last week.

The Shanghai Stock Exchange Composite index is forming a 5-month descending triangle pattern. It is neutral before the price breaks out from the triangle.

In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 8-month descending broadening wedge pattern. It is neutral before the price breaks out from the wedge.

The 30-year U.S. treasury bond index is forming a 6-month ascending broadening wedge pattern. It is neutral before price breaks out from the wedge.

The U.S. dollar index formed a 4-week symmetrical triangle pattern. The price broke above the upper boundary of the triangle. It is bullish with an upside price target projected at 99.3.

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.

The silver index is forming a 4-week descending triangle pattern. It is neutral before the price breaks out from the triangle.

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

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 US treasury bond is outperforming and crude oil is underperforming.