03/13/2022 – Market Update
Volatile Week for All Markets
It was a volatile week for stocks, crude oil, US treasury bonds, US dollar, gold and silver. Both crude oil and the US dollar have reached our short-term price targets. Oil Equipment, Energy, and Precious Metals ranked as the top three sectors with mostly strong technical strengths. The S&P 500 index is close to the late part of the first intermediate downward wave. The broad stock market is projected to be in a short-term bullish time-window until 4/5/2022.
Table of Contents
- Broad Market to be in Short-Term Bullish Time-Window
- Sector Performance Ranking with Oil Equipment Leading
- S&P 500 Index in Primary Corrective Wave A
- German DAX Index: Elliott Wave
- India Bombay Index in 2-Month Descending Broadening Wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 3.5-Month Descending Broadening Wedge Pattern
- US Dollar Broke above 1.5-Month Ascending Triangle Pattern
- Gold in 1.5-Month Ascending Broadening Wedge Pattern
- Crude Oil Broke above 2.5-Month Ascending Broadening wedge Pattern
- Asset Class Performance Ranking with 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 86 on Friday 3/11/2022 (down from 165 the previous week) which is above the panic threshold level of 42 and indicates a bearish market. The Wilshire 5000 index is below 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 4/5/2022.
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: valley
Date of Next Cycle High: 04/05/2022
Broad Market Instability Index (BIX): 86, above the panic threshold (bearish)
Momentum Indicator: slightly negative (bearish)
Sector Performance Ranking with Oil Equipment 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 Oil Equipment, Energy, and Precious Metals. Underperforming sectors are Internet, Biotech, and Consumer Services.
S&P 500 Index in Primary Corrective Wave A
As shown in the weekly chart below, since March of 2020, the SPX has been in a primary upward wave [5], and it has developed intermediate (1)–(2)–(3)–(4)–(5) five-wave sequence. Primary upward wave [5] is ending, and primary corrective wave [A] started. Primary corrective wave [A] is going to have intermediate (1)–(2)–(3)–(4)–(5) five-wave sequence. Now it is in an intermediate downward wave (1).
The S&P 500 index is forming a 3-month downtrend channel pattern. It is bearish before the price breaks above the upper boundary of the channel.
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 [5] which developed an intermediate (1)–(2)–(3)–(4)–(5) five-wave sequence. Primary upward wave [5] ended, and primary corrective wave [A] started. Primary corrective wave [A] is going to have intermediate (1)–(2)–(3)–(4)–(5) five-wave sequence. Currently it is in the first intermediate downward wave (1).
India Bombay Index in 2-Month Descending Broadening Wedge Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 2-month 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 3-month descending broadening 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 formed a 16-month horizontal trading range pattern between 3350 and 3700. The price broke below the lower boundary of the range. It is bearish with a downside price target projected at 3160.
US Treasury Bond in 3.5-Month Descending Broadening Wedge Pattern
The 30-year U.S. treasury bond 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.
US Dollar Broke above 1.5-Month Ascending Triangle Pattern
The U.S. dollar index formed a 1.5-month ascending triangle pattern. The price has broken above the upper boundary of the triangle. It is bullish with an upside price target projected at 99. This price target has been reached.
Gold in 1.5-Month Ascending Broadening Wedge Pattern
The gold index is forming a 1.5-month ascending broadening wedge pattern. It is bullish as long as the price stays above the lower boundary of the wedge.
Silver in 1.5-Month Ascending Broadening Wedge Pattern
The silver index is forming a 1.5-month ascending broadening wedge pattern. It is bullish as long as the price stays above the lower boundary of the wedge.
Crude Oil Broke above 2.5-Month Ascending Broadening wedge Pattern
The crude oil index formed a 2.5-month ascending broadening wedge pattern. The price has broken above the upper boundary of the wedge. It is bullish with an upside price target projected at 120. This price target has been reached.
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.
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