11/08/2020 – Market Update
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The stock market rebounded sharply in the election week and the S&P 500 index was approaching the record high. Except consumer goods and utilities sectors were relatively weak, all other sectors were decisively strong to the upside. Semiconductors, Home Construction, and Internet sectors ranked as the top three sectors with mostly strong technical strengths. The US dollar and the 30-year US treasury bond were still very weak. The broad stock market is projected to be in a short-term bullish time-window until 11/19/2020.
Table of Contents
- Broad Market in Short-Term Bullish Time-Window
- Sector Performance Ranking with Semiconductors Leading
- S&P 500 Index in Primary Upward Wave X
- German DAX Index: Elliott Wave
- India Bombay Index in 3.5-month broadening triangle Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 3-Month Falling Wedge Pattern
- US Dollar in 7-Week Descending Broadening Wedge Pattern
- Gold Breaking out from 3.5-Month Symmetrical Triangle Pattern
- Crude Oil in 2-Month Descending Triangle Pattern
- Asset Class Performance Ranking with Equity Leading
Broad Market in Short-Term Bullish Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 8 on Friday 11/6/2020 (down from 124 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 bullish time-window until 11/19/2020.
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: 11/19/2020
Broad Market Instability Index (BIX): 8, 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, Home Construction, and Internet. Underperforming sectors are Energy, Oil Equipment, and Biotech.
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 formed a 3-month symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.
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 3.5-Month Broadening Triangle Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 3.5-month broadening 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 is forming a 4-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 3-Month Falling Wedge Pattern
The 30-year U.S. treasury bond index is forming a 3-month falling wedge pattern. It is neutral before the price breaks out from the wedge.
US Dollar in 7-Week Descending Broadening Wedge Pattern
The U.S. dollar index is forming a 7-week descending broadening wedge pattern. It is bearish as long as the price is below the upper boundary of the wedge.
Gold Breaking out from 3.5-Month Symmetrical Triangle Pattern
The gold index formed a 3.5-month symmetrical triangle pattern. The price broke above the upper boundary of the triangle last week. It is bullish with an upside price target projected at 2060.
Silver in 3-Month Descending Triangle Pattern
The silver index is forming a 3.5-month descending triangle pattern. It is neutral before the price breaks out from the triangle.
Crude Oil in 2-Month Descending Triangle Pattern
The crude oil index is forming a 2-month descending triangle pattern. It is bearish before the price breaks above the upper boundary of the triangle.
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 crude oil is underperforming.
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