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10/10/2021 – Market Update

October 12, 2021 Leave a comment

 

Sideways Market

 

The S&P 500 index was testing its 89-day exponential moving average (EMA) in sideways market last week. Energy, Oil Equipment, and Banks ranked as the top three sectors with mostly strong technical strengths. Crude oil were in an uptrend and the 30-year U.S. treasury bond extended slide. The broad stock market is projected to be in a short-term bullish time-window until 10/22/2021.

 
Table of Contents

 

 

Broad Market in Short-Term Bullish Time-Window

 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 31 on Friday 10/8/2021 (down from 59 the previous week) which is below the panic threshold level of 42 and indicates a bullish market. The Wilshire 5000 index is slightly 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 10/22/2021.

 

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: 10/22/2021
Broad Market Instability Index (BIX): 31, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)

 

 
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 Banks. Underperforming sectors are Precious Metals, Biotech, and Home Construction.

 

 

 
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 6-week descending broadening wedge pattern. It is bearish before the price breaks above the upper 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 Ascending Broadening Wedge Pattern

 

The India Bombay Stock Exchange 30 Sensex index is forming a 6-week 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 2-month ascending broadening wedge pattern. It is bullish as long as the price stays above the lower boundary of the wedge.

 

In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 11-month ascending triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
US Treasury Bond Broke Below 2-Month Symmetrical Triangle Pattern

 

The 30-year U.S. treasury bond index formed a 2-month symmetrical triangle pattern. The price has broken below the lower boundary of the triangle. It is bearish with a downside price target projected at 160.5. This price target has been reached.

 


 
US Dollar in 3.5-Month Ascending Broadening Triangle pattern

 

The U.S. dollar index is forming a 3.5-month ascending broadening triangle pattern. It is bullish as long as the price stays above the lower boundary of the triangle.

 


 
Gold in 3.5-Month Descending Broadening Triangle Pattern

 

The gold index is forming is forming a 3.5-month descending broadening triangle pattern. It is bearish before the price breaks above the upper boundary of the triangle.

 

 
Silver in 3.5-Month Descending Broadening Wedge Pattern

 

The silver index is forming a 3.5-month descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.

 

 
Crude Oil in 1.5-Month Uptrend Channel Pattern

 

The crude oil index is forming a 1.5-month uptrend channel pattern. It is bullish as long as the price stays above the lower boundary of the channel.

 


 
Asset Class Performance Ranking with 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 oil is outperforming and the US treasury bond is underperforming.