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10/31/2021 – Market Update

November 1, 2021 Leave a comment

 

Stocks Drifting Up into November

 

The US stock market was slowly drifting up last week. Energy, Technology, and Semiconductors ranked as the top three sectors with mostly strong technical strengths. Crude oil was still in an uptrend channel pattern. The 30 year US treasury bond had an upward breakout from a bottom process pattern last week. The broad stock market is projected to be in a short-term bearish time-window until 11/19/2021.

 
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 19 on Friday 10/29/2021 (down from 20 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 11/19/2021.

 

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: 11/19/2021
Broad Market Instability Index (BIX): 19, 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, Technology, and Semiconductors. Underperforming sectors are Precious Metals, Telecommunication, and Industrials.

 

 

 
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 formed a 6-week descending broadening wedge pattern. The price has broke above the upper boundary of the wedge. It is bullish with an upside price target projected at 4540. This price target has been reached.

 


 
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 Beached below 2-Month Ascending Broadening Wedge Pattern

 

The India Bombay Stock Exchange 30 Sensex index formed a 2-Month ascending broadening wedge pattern. The price breached the lower boundary of the wedge. It is bearish with a downside price target projected at 57500.

 


 
Shanghai Composite Index: Intermediate-Term Pictures

 

The Shanghai Stock Exchange Composite index is forming a 2-month descending triangle pattern. It is neutral before the price breaks out from the triangle.

 

In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 1-year ascending triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
US Treasury Bond Broke above 4-Week Descending Broadening Wedge Pattern

 

The 30-year U.S. treasury bond index formed a 4-week 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 161.25.

 


 
US Dollar in 4-Week Falling Wedge Pattern

 

The U.S. dollar index is forming a 4-week falling wedge pattern. It is neutral before the price breaks out from the wedge.

 


 
Gold in 2-Month Descending Broadening Triangle Pattern

 

The gold index is forming is forming a 2-month descending broadening triangle pattern. It is bearish before the price breaks above the upper boundary of the triangle.

 

 
Silver in 6-Week Uptrend Channel Pattern

 

The silver index is forming 6-week uptrend channel pattern. It is bullish as long as the price stays above the lower boundary of the channel.

 

 
Crude Oil in 2.5-Month Uptrend Channel Pattern

 

The crude oil index is forming a 2.5-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 gold is underperforming.