11/07/2021 – Market Update
Stocks and Bonds Up Together
The US stock market extended gain last week. The S&P 500 index is forming a 5-week rising wedge pattern. Semiconductors, Technology, and Energy ranked as the top three sectors with mostly strong technical strengths. The 30 year US treasury bond advanced sharply. Crude oil turned bearish after the price broke below the lower boundary of its uptrend channel. The broad stock market is projected to be in a short-term bearish time-window until 11/29/2021.
Table of Contents
- Broad Market in Short-Term Bearish Time-Window
- Sector Performance Ranking with Semiconductors Leading
- S&P 500 Index Ending Primary Upward Wave X
- German DAX Index: Elliott Wave
- India Bombay Index in 3-Week Descending Broadening Wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond Broke above 4-Week Descending Broadening Wedge Pattern
- US Dollar in 6-Week Descending Triangle Pattern
- Gold in 7-Week Rising Wedge Pattern
- Crude Oil Broke below 2.5-Month Uptrend Channel Pattern
- Asset Class Performance Ranking with Oil Leading
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 17 on Friday 11/05/2021 (down from 19 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 11/29/2021.
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: 11/29/2021
Broad Market Instability Index (BIX): 17, 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, Technology, and Energy. Underperforming sectors are Precious Metals, Biotech, and Telecommunication.
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-week rising wedge pattern. It is bullish as long as the price stays 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 3-Week Descending Broadening Wedge Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 3-week descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index is forming a 2-month falling wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
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 has broken above the upper boundary of the wedge. It is bullish with an upside price target projected at 161.25. This price target has been reached.
US Dollar in 6-Week Descending Triangle Pattern
The U.S. dollar index is forming a 6-week descending triangle pattern. It is neutral before the price breaks above the upper boundary of the triangle.
Gold in 7-Week Rising Wedge Pattern
The gold index is forming a 7-week rising wedge pattern. It is bullish as long as the price stays above the lower boundary of the wedge.
Silver in 7-Week Uptrend Channel Pattern
The silver index is forming 7-week uptrend channel pattern. It is bullish as long as the price stays above the lower boundary of the channel.
Crude Oil Broke below 2.5-Month Uptrend Channel Pattern
The crude oil index formed a 2.5-month uptrend channel pattern. It is bearish after the price broke below 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.
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