04/03/2022 – Market Update
Stock Rebound Nears End
Last week the stock market started to pull back after the recent rebound. The S&P 500 index is going to test its 89-day exponential moving average again, and intermediate downward wave (3) will be the next. Currently Oil Equipment, Energy, and Precious Metals ranked as the top three sectors with mostly strong technical strengths. The broad stock market is projected to be in a short-term bearish time-window until 4/20/2022.
Table of Contents
- Broad Market to be in Short-Term Bearish 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 5-week rising wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 4-Month Descending Broadening Wedge Pattern
- US Dollar in 5-Week Descending Triangle Pattern
- Gold in 3-Week Symmetrical Triangle Pattern
- Crude Oil in 6-Week Symmetric Triangle 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 4/1/2022 (up from 3 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 bearish time-window until 4/20/2022.
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: peak
Date of Next Cycle Low: 04/20/2022
Broad Market Instability Index (BIX): 17, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)
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 Home Construction, Internet, and Biotech.
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 intermediate upward wave (2), and intermediate downward wave (3) will be the next.
The S&P 500 index is forming a 6-week rising wedge pattern. It is bullish as long as the price is 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 [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 intermediate upward wave (2), and intermediate downward wave (3) will be the next.
India Bombay Index in 5-week rising wedge Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 6-week rising wedge pattern. It is bullish as long as the price is above the lower boundary of the wedge.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index is forming a 3-week ascending triangle pattern in the daily chart. It is neutral before the price breaks out from the triangle.
In the following weekly chart, the Shanghai Stock Exchange Composite index formed a 6-month falling wedge pattern. It is bearish as long as the price is below the upper boundary of the wedge.
US Treasury Bond in 4-Month Descending Broadening Wedge Pattern
The 30-year U.S. treasury bond index is forming a 4-month descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
US Dollar in 5-Week Descending Triangle Pattern
The U.S. dollar index is form a 5-week descending triangle pattern. It is neutral before the price breaks out from the triangle.
Gold in 3-Week Symmetrical Triangle Pattern
The gold index is forming a 3-week symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.
Silver in 4-Week Falling Wedge Pattern
The silver index is forming a 4-week falling wedge pattern. It is bearish as long as the price is below the upper boundary of the wedge.
Crude Oil in 6-Week Symmetric Triangle Pattern
The crude oil index is forming a 6-week symmetric triangle pattern. It is neutral before the price breaks out from the triangle.
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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