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11/29/2020 – Market Update

November 30, 2020 Leave a comment

 

Stock Market Drifted Higher

 

The stock market drifted higher last week. Semiconductors, Oil Equipment, and Consumer Goods sectors ranked as the top three sectors with mostly strong technical strengths. Both the US dollar and gold declined sharply while crude oil broke out to the upside last week. The 30-year US treasury bond is going to test the upside resistance of its downtrend channel. The broad stock market is projected to be in a short-term bearish time-window until 12/11/2020.

 
Table of Contents

 

 

Broad Market to be in Short-Term Bearish Time-Window

 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 7 on Friday 11/27/2020 (up from 3 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 bearish time-window until 12/11/2020.

 

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: 12/11/2020
Broad Market Instability Index (BIX): 7, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)

 

 
Sector Performance Ranking with Semiconductors 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 Semiconductors, Oil Equipment, and Consumer Goods. Underperforming sectors are Precious Metals, Utilities, and Real Estate.

 

 

 
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 intermediate corrective wave (b).

 

The S&P 500 index on daily chart is forming a 5-month rising wedge pattern. It is bullish as long as the price stays above the lower boundary of the wedge.

 


 
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 intermediate corrective wave (b).

 


 
India Bombay Index in 2-Month Ascending Broadening Triangle Pattern

 

The India Bombay Stock Exchange 30 Sensex index is forming a 2-month ascending broadening 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 is forming a 5-month horizontal trading range between 3200 and 3450. It is neutral before the price breaks out from the range.

 

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 with an upside price target projected at 3425. This price target has been reached. Now it is in a consolidation.

 


 
US Treasury Bond in 5-Month Downtrend Channel Pattern

 

The 30-year U.S. treasury bond index is forming a 5-month downtrend channel pattern. It is bearish before the price breaks above the upper boundary of the channel.

 


 
US Dollar in 2-Month Descending Broadening Wedge Pattern

 

The U.S. dollar index is forming a 2-month descending broadening wedge pattern. It is bearish as long as the price is below the upper boundary of the wedge.

 


 
Gold Broke below 2-Month Horizontal Trading Range

 

The gold index is forming a 2-month horizontal trading range between 1850 and 1970. The price broke below the lower boundary last week. It is bearish with a downside price target projected at 1760.

 

 
Silver in 4-Month Descending Triangle Pattern

 

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

 

 
Crude Oil Broke above 2.5-Month symmetrical Triangle Pattern

 

The crude oil index formed a 2.5-month symmetrical triangle pattern. The price broke above the upper boundary last week. It is bullish with an upside price target projected at 48.

 


 
Asset Class Performance Ranking with Equity 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 equity is outperforming and the US dollar is underperforming.