07/05/2012 – Market Update
Stocks Extended Gains before July Fourth Holiday
The stock market extended gains to new record highs last week, but the momentum was weakening. Energy, Oil Equipment, and Technology ranked as the top three sectors with mostly strong technical strengths. The prices of crude oil, the US dollar, and the 30-year US treasury bond also extended higher. The broad stock market is projected to be in a short-term bullish time-window until 7/9/2021.
Table of Contents
- Broad Market to be in Short-Term Bullish Time-Window
- Sector Performance Ranking with Energy Leading
- S&P 500 Index Ending Primary Upward Wave X
- German DAX Index: Elliott Wave
- India Bombay Index in 5-Week Rising Wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 8-Week Ascending Broadening Wedge Pattern
- US Dollar Broke above 3-Month Falling Wedge Pattern
- Gold Broke Below 3-Month Uptrend Channel Pattern
- Crude Oil Broke above 3.5-Month Trading Range Pattern
- Asset Class Performance Ranking with Crude Oil Leading
Broad Market to be in Short-Term Bullish Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 2 on Friday 7/2/2021 (down from 18 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 7/9/2021.
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: 7/9/2021
Broad Market Instability Index (BIX): 2, below the panic threshold (bullish)
Momentum Indicator: slightly negative (neutral)
Sector Performance Ranking with Energy 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 Energy, Oil Equipment, and Technology. Underperforming sectors are Precious Metals, Utilities, and Pharmaceuticals.
S&P 500 Index Ending 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. After primary flat wave [W] ended late March of 2020, primary upward wave [X] started. Primary upward wave [X] has developed intermediate (a)–(b)–(c) three-wave sequence. Primary upward wave [X] is due to end, and primary downward wave [Y] will be the next. Primary downward wave [Y] is going to have intermediate (w)–(x)–(y) three-wave sequence.
The S&P 500 index is forming a 3-month rising wedge pattern. It is bullish as long as the price is above the lower boundary of the wedge.
German DAX Index: Elliott Wave
In the following weekly chart, since early March of 2020 the German DAX index has been in primary upward wave [X] which developed an intermediate (a)–(b)–(c) three-wave sequence. Currently it is in a transition from primary upward wave [X] to primary downward wave [Y]. The next will be the first intermediate downward wave (w).
India Bombay Index in 6-Week Rising Wedge Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 6-week rising wedge pattern. It is bullish as long as the price is above the lower boundary of the wedge.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index is forming a 4-month ascending broadening wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.
In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 1.5-year uptrend channel pattern. It is bullish as long as the price stays above the lower boundary of the channel.
US Treasury Bond Broke in 8-Week Ascending Broadening Wedge Pattern
The 30-year U.S. treasury bond index is forming a 8-week ascending broadening wedge pattern. It is bull as long as the price is above the lower boundary of the wedge.
US Dollar Broke above 3-Month Falling Wedge Pattern
The U.S. dollar index formed a 3-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 92.4. This price target has been reached, and now it is in a consolidation.
Gold Broke below 3-Month Uptrend Channel Pattern
The gold index formed a 3-month uptrend channel pattern. The price has broken below the lower boundary of the channel. It is bearish with a downside price target projected at 1760. This price target has been reached, and now it is in a consolidation.
Silver Broke below 2-Month Ascending Broadening Wedge Pattern
The silver index formed a 2-month ascending broadening wedge pattern. The price has broke below the lower boundary of the wedge. It is bearish with a downside price target projected at 25.
Crude Oil Broke above 3.5-Month Trading Range Pattern
The crude oil index formed a 3.5-month horizontal trading range pattern. The price has broken above the upper boundary of the range. It is bullish with an upside price target projected at 72. This price target has been reached.
Asset Class Performance Ranking with Crude Oil 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 crude oil is outperforming and precious metal is underperforming.
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