05/30/2022 – Market Update
Stocks Bounced Off a Short-Term Bottom
The stock market rebounded last week. The S&P 500 index formed “W”-shape pattern and turned short-term bullish after the price broke above the neckline of a double bottom. However, it could be just a bear market rally. Oil Equipment, Energy, and Utilities are ranked as the top three sectors with mostly strong technical strengths. The broad stock market is projected to be in a short-term bullish time-window until 6/13/2022.
Table of Contents
- Broad Market in Short-Term Bullish Time-Window
- Sector Performance Ranking with Energy Leading
- S&P 500 Index in Primary Corrective Wave A
- German DAX Index: Elliott Wave
- India Bombay Index Broke above 7-Week Downtrend Channel Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 4-Week Rising Wedge Pattern
- US Dollar Breached below 4-Week Ascending Triangle Pattern
- Gold Broke above 6-Week Downtrend Channel Pattern
- Crude Oil in 2-Month Ascending Broadening Wedge Pattern
- Asset Class Performance Ranking with Oil Leading
Broad Market in Short-Term Bullish Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 4 on Friday 5/27/2022 (down from 126 the previous week) which is below the panic threshold level of 42 and indicates a bullish market. The Wilshire 5000 index is below 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 6/13/2022.
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: upward
Date of Next Cycle High: 06/13/2022
Broad Market Instability Index (BIX): 4, below the panic threshold (bullish)
Momentum Indicator: positive (bullsih)
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 Utilities. Underperforming sectors are Internet, Consumer Services, 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. Currently, it is in intermediate downward wave (3). Typically the third wave has a significant move, and it will contains 1–2–3–4–5 minor waves. Right now it is in minor upward wave 2.
The S&P 500 index formed a 3-week “W” shape bottom pattern in the daily chart. The price broke above the neckline last Friday. It is bullish with an upside price target projected at 4250.
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 downward wave (3).
India Bombay Index Broke above 7-Week Downtrend Channel Pattern
The India Bombay Stock Exchange 30 Sensex index formed a 7-week downtrend channel pattern. The price broke above the upper boundary of the channel. It is neutral before the price breaks above 55000 level.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index is forming a 4-week rising wedge pattern in the daily chart. It is bullish before the price breaks below the lower boundary of the wedge.
In the following weekly chart, the Shanghai Stock Exchange Composite index formed a 8-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-Week Rising Wedge Pattern
The 30-year U.S. treasury bond index is forming a 4-week rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.
US Dollar Breached below 4-Week Ascending Triangle Pattern
The U.S. dollar index formed a 4-week ascending triangle pattern. The price breached the lower boundary of the triangle. It is neutral as long as the price is above 101.4.
Gold Broke above 6-Week Downtrend Channel Pattern
The gold index formed a 6-week downtrend channel pattern. The price broke above the upper boundary of the channel. It is neutral before the price breaks above 1870 level.
Silver Broke above 5-Week Falling Wedge Pattern
The silver index formed a 5-week falling wedge pattern. The price has broken above the upper boundary of the wedge. It is bullish with an upside price target projected at 24.
Crude Oil in 2-Month Ascending Broadening Wedge Pattern
The crude oil index is forming a 2-month ascending broadening wedge. It is bullish as long as the price is above the lower boundary of the wedge.
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 US treasury bond is underperforming.
Comments (0)
Trackbacks (0)
Leave a comment
Trackback
