09/06/2021 – Market Update
Flat Stock Market
The stock market was flat with a very low volatility last week. Technology, Real Estate, and Healthcare ranked as the top three sectors with mostly strong technical strengths. The S&P 500 index was still in developing its multi-month rising wedge pattern. The 30-year U.S. treasury bond, the US dollar, gold, and crude oil all are waiting for breakouts. The broad stock market is projected to be in a short-term neutral time-window until 9/10/2021.
Table of Contents
- Broad Market in Short-Term Neutral Time-Window
- Sector Performance Ranking with Technolgy Leading
- S&P 500 Index Ending Primary Upward Wave X
- German DAX Index: Elliott Wave
- India Bombay Index in 4.5-Month Ascending Broadening Wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 2-Month Ascending Triangle Pattern
- US Dollar in 2.5-Month Ascending Broadening Triangle Pattern
- Gold in 2.5-Month Descending Broadening Triangle Pattern
- Crude Oil in 2.5-Month Descending Broadening Wedge Pattern
- Asset Class Performance Ranking with Equity Leading
Broad Market in Short-Term Neutral Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 5 on Friday 9/3/2021 (down 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 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 9/10/2021.
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: peak
Date of Next Cycle Low: 9/29/2021
Broad Market Instability Index (BIX): 5, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)
Sector Performance Ranking with Technology 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 Technology, Real Estate, and Healthcare. Underperforming sectors are Oil Equipment, Energy, and Precious Metals.
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 5-month rising wedge pattern. It is bullish as long as the price is above the lower boundary of the wedge. If the price breaks below the lower boundary, it would turn bearish with a downside price target projected at 4075.
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 4.5-Month Ascending Broadening Wedge Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 4.5-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 formed a 3-month descending broadening wedge pattern. The price broke above the upper boundary of the wedge last week. It is bullish with an upside price target projected at 3720.
In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 1-year ascending broadening wedge pattern. It is neutral before the price breaks out from the wedge.
US Treasury Bond in 2-Month Ascending Triangle Pattern
The 30-year U.S. treasury bond index is forming a 2-month ascending triangle pattern. It is neutral before the price breaks out from the triangle.
US Dollar in 2.5-Month Ascending Broadening Triangle pattern
The U.S. dollar index is forming a 2.5-month ascending broadening triangle pattern. It is bullish as long as the price stays above the lower boundary of the triangle.
Gold in 2.5-Month Descending Broadening Triangle Pattern
The gold index is forming is forming a 2.5-month descending broadening triangle pattern. It is bearish before the price breaks above the upper boundary of the triangle.
Silver Broke above 3-Month Downtrend Channel Pattern
The silver index formed a 3-month downtrend channel pattern. The price broke above the upper boundary of the channel last week. It is bullish with an upside price target projected at 26.5.
Crude Oil in 2.5-Month Descending Broadening Wedge Pattern
The crude oil index formed a 2.5-month descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
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.
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