Archive

Archive for September 9, 2019

09/08/2019 – Market Update

September 9, 2019 Leave a comment

 

S&P 500 Broke above 4-Week Trading Range

 

The S&P 500 index had an upward breakout from a 4-week-long trading range last week, and an upside price target is projected at 3010. The Shanghai Stock Exchange Composite index also sharply broke above a 2-month descending broadening wedge pattern with an upside price target projected at 3040. The US dollar, 30-year US treasury bond, gold and silver are in consolidations. The broad stock market is projected to be in a short-term neutral time-window until 9/17/2019.

 
Table of Contents


 

 

Broad Market in Short-Term Neutral Time-Window


 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 9 on Friday 9/6/2019 (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 the Leading Wave Index (LWX), the broad stock market is projected to be in a short-term neutral time-window until 9/17/2019.

 

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: peak
Date of Next Cycle Low: 10/4/2019
Broad Market Instability Index (BIX): 9, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)

 

 
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, Semiconductors, and Home Construction. Underperforming sectors are Oil Equipment, Energy, and Biotech.

 

 

 
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. 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 below formed a 4-week trading range between 2840 and 2940. The price broke above the upper boundary of the trading range. It is bullish with an upside price target projected at 3010.

 


 
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 3-Month Downtrend Channel


 

The India Bombay Stock Exchange 30 Sensex index is forming a 3-month downtrend Channel pattern. It is bearish as long as the price stays below the upper boundary of the channel.

 


 
Shanghai Composite Index: Intermediate-Term Pictures


 

The Shanghai Stock Exchange Composite index formed a 2-month descending broadening wedge pattern. The price has broken above the upper boundary of the wedge. It is bullish with an upside price target projected at 3040.

 

In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 5-month falling wedge pattern. The price has broken above the upper boundary of the wedge. It is bullish with an upside price target projected at 3270

 


 
US Treasury Bond Forming 4-Month Ascending Broadening Wedge pattern


 

The 30-year U.S. treasury bond index is forming a 4-month ascending broadening wedge pattern. It is neutral before price breaks out from the wedge.

 


 
US Dollar in 2-Month Ascending Broadening Wedge Pattern


 

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

 


 
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.

 

 
Silver Forming 2.5-Month Uptrend Channel


 

The silver index is forming a 2.5-month uptrend channel pattern. It is bullish as long as the price stays above the lower boundary of the channel.

 

 
Crude Oil Forming 4-Month Descending Triangle Pattern


 

The crude oil index is forming a 4-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.