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Archive for May 26, 2020

05/24/2020 – Market Update

May 26, 2020 Leave a comment

 

Sideways Markets

 

The S&P 500 index is trading in sideways with a 7-week ascending triangle pattern while gold is forming a horizontal trading range. Precious metals, internet, and biotech sectors ranked as the top three sectors with mostly strong technical strengths. Crude oil is forming a bullish broadening triangle bottom. The US dollar and US 30-year treasury bond are still in multi-week symmetrical triangle patterns without breakouts. The broad stock market is projected to be in a short-term neutral time-window until 6/5/2020.

 
Table of Contents


 

 

Broad Market is in Short-Term Neutral Time-Window


 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 2 on Friday 5/22/2020 (down from 4 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 6/5/2020.

 

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: 6/19/2020
Broad Market Instability Index (BIX): 2, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)

 

 
Sector Performance Ranking with Precious Metals 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, Internet, and Biotech. Underperforming sectors are Oil Equipment, Energy, and Financials.

 

 

 
S&P 500 Index in Primary Corrective Wave W


 

As shown in the weekly chart below, since October of 2018, the SPX has been in primary flat wave [W] which is the first wave of the primary corrective wave [W][X][Y] sequence. This flat wave [W] has developed an intermediate expanded flat correction (W)(X)(Y) three-wave sequence. Currently it is in intermediate downward wave (Y) having a short-term abc wave sequence. Waves a and b have been developed, and downward wave c will be the next.

 

The S&P 500 index on daily chart is forming a 7-week ascending broadening wedge pattern. It is neutral before the price breaks out from the wedge.

 


 
German DAX Index: Elliott Wave


 

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

 


 
India Bombay Index Forming 4-Week Descending Triangle Pattern


 

The India Bombay Stock Exchange 30 Sensex index is forming a 4-week descending triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
Shanghai Composite Index: Intermediate-Term Pictures


 

The Shanghai Stock Exchange Composite index formed a 8-week rising wedge pattern. The price broke below the lower boundary of the wedge. It is bearish with a downside price target projected at 2800.

 

In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 1-year downtrend channel pattern. It is bearish before the price breaks above the upper boundary of the channel.

 


 
US Treasury Bond Forming 8-Week Symmetrical Triangle Pattern


 

The 30-year U.S. treasury bond index is forming a 8-week symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
US Dollar in 8-Week Symmetrical Triangle Pattern


 

The U.S. dollar index is forming a 8-week symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
Gold in 7-week horizontal trading range


 

The gold index formed a 7-week horizontal trading range between 1680 and 1780. It is neutral before the price breaks out from the range.

 

 
Silver 8-Week Ascending Broadening Wedge Pattern


 

The silver index is forming a 8-week ascending broadening wedge pattern. It is neutral before the price breaks out from the wedge.

 

 
Crude Oil in 10-Week Broadening Triangle Pattern


 

The crude oil index is forming a 10-week broadening triangle bottom pattern. It is neutral before the price breaks out from the triangle.

 


 
Asset Class Performance Ranking with Gold 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 gold is outperforming and Oil is underperforming.