07/12/2020 – Market Update
Stocks Traded Flat
The stock market was flat while gold and silver were bullish in their chart patterns last week. Precious metals, internet, and technology sectors ranked as the top three sectors with mostly strong technical strengths. The US 30-year treasury bond is near an upward breakout from a symmetrical triangle pattern. The US dollar is bearish in a falling wedge pattern while crude oil is bullish in a rising wedge pattern. The broad stock market is projected to be in a short-term bullish time-window until 7/17/2020.
Table of Contents
- Broad Market is in Short-Term Bullish Time-Window
- Sector Performance Ranking with Precious Metals Leading
- S&P 500 Index in Primary Upward Wave X
- German DAX Index: Elliott Wave
- India Bombay Index in 7-week Rising Wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 4-Month Symmetrical Triangle Pattern
- US Dollar in 4-month falling wedge Pattern
- Gold in 6-week Rising Wedge Pattern
- Crude Oil in 7-Week Rising Wedge Pattern
- Asset Class Performance Ranking with Gold Leading
Broad Market in Short-Term Bullish Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 16 on Friday 7/10/2020 (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 slightly negative. Based on the forecast of the Leading Wave Index (LWX), the broad stock market is projected to be in a short-term bullish time-window until 7/17/2020.
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: upward
Date of Next Cycle High: 7/17/2020
Broad Market Instability Index (BIX): 16, below the panic threshold (bullish)
Momentum Indicator: slightly negative (neutral)
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 Technology. Underperforming sectors are Oil Equipment, Energy, and Banks.
S&P 500 Index in Primary Upward Wave X
As shown in the weekly chart below, since October of 2018, the SPX has been in a primary corrective wave [W]–[X]–[Y] sequence. Primary flat wave [W] ended late March, and primary upward wave [X] has started. Primary upward wave [X] is going to have intermediate (a)–(b)–(c) three-wave sequence. Currently it is in downward intermediate wave (b) of the (a)–(b)–(c) three-wave sequence. Upward intermediate wave (c) will be the next.
The S&P 500 index on daily chart is forming a 6-week symmetrical triangle pattern. It is neutral before the price breaks out from the triangle. Now the price is testing the upper boundary of the triangle. If it breaks out upward, an upside price target would be projected at 3335.
German DAX Index: Elliott Wave
In the following weekly chart, since early March the German DAX index has been in primary upward wave [X] which will have an intermediate (a)–(b)–(c) three-wave sequence. Currently it is in downward intermediate wave (b). Upward intermediate wave (c) will be the next.
India Bombay Index in 7-week Rising Wedge Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 7-week rising wedge pattern. It is bullish as long as the price stays above the lower boundary of the wedge.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index formed a 3-month uptrend channel. The price has broken above the upper boundary of the channel, and fast rising prices has reached the 4th parallel line of the channel. It is bullish as long as the price stays above the 3rd parallel line.
In the following weekly chart, the Shanghai Stock Exchange Composite index formed a 1.5-year symmetrical triangle pattern. The price has broken above the upper boundary of the triangle. It is bullish with an upside price target projected at 3425. This price target was briefly touched last week.
US Treasury Bond in 4-Month Symmetrical Triangle Pattern
The 30-year U.S. treasury bond index is forming a 4-month symmetrical triangle pattern. It is neutral before the price breaks out from the triangle. The price breached the upper boundary of the triangle. If the price stay above the upper boundary of the triangle, an upside price target would be projected at 184.
US Dollar in 4-month falling wedge Pattern
The U.S. dollar index is forming a 4-month falling wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
Gold in 6-week Rising Wedge Pattern
The gold index is forming a 6-week rising wedge pattern. It is bullish as long as the price stays above the lower boundary of the wedge.
Silver in 4-Month Uptrend Channel Pattern
The silver 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.
Crude Oil in 7-Week Rising Wedge Pattern
The crude oil index is forming a 7-week rising wedge pattern. It is bullish as long as the price stays above the lower boundary of 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 US treasury bond is outperforming and oil is underperforming.
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