07/17/2022 – Market Update
S&P 500 Testing Resistance Level 3900
Stocks were almost flat last week with reducing market volatility. The US dollar continued to surge and hit 20-year high while gold and silver tumbled. The S&P 500 index is neutral as it forms a 5-week ascending triangle pattern with an upper resistance level at 3900. Pharmaceuticals, Utilities, and Health Care are ranked as the top three sectors with mostly strong technical strengths. The broad stock market is projected to be in a short-term neutral time-window until 7/20/2022.
Table of Contents
- Broad Market in Short-Term Neutral Time-Window
- Sector Performance Ranking with Pharmaceuticals Leading
- S&P 500 Index in Primary Corrective Wave A
- German DAX Index: Elliott Wave
- India Bombay Index Broke below 4-Week Rising Wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 3-Month Descending Broadening Wedge Pattern
- US Dollar Broke above 2.5-Month Rising Wedge Pattern
- Gold Broke below 7-Week Horizontal Trading Range Pattern
- Crude Oil in 6-Week Descending Broadening Wedge Pattern
- Asset Class Performance Ranking with the US dollar Leading
Broad Market in Short-Term Neutral Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 15 on Friday 7/15/2022 (down from 35 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 slightly positive. Based on the forecast of the Leading Wave Index (LWX), the broad stock market is projected to be in a short-term neutral time-window until 7/20/2022.
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: 08/11/2022
Broad Market Instability Index (BIX): 15, below the panic threshold (bullish)
Momentum Indicator: slightly positive (bullish)
Sector Performance Ranking with Pharmaceuticals 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 Pharmaceuticals, Utilities, and Health Care. Underperforming sectors are Internet, Precious Metals, and Materials.
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. Intermediate downward wave (3) will contain 1–2–3–4–5 minor waves. Right now it is in minor downward wave 3.
The S&P 500 index is forming a 5-week ascending triangle pattern on the daily chart. It is neutral before the price breaks from the triangle.
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 below 4-Week Rising Wedge Pattern
The India Bombay Stock Exchange 30 Sensex index formed a 4-week rising wedge pattern. The price broke blow the lower boundary of the wedge last week. It is bearish with a downside price target projected at 53000.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index formed a 2-month rising wedge pattern on the daily chart. The price has broken below the lower boundary of the wedge. It is bearish with a downside price target projected at 3200.
In the following weekly chart, the Shanghai Stock Exchange Composite index formed a 2-month rising wedge pattern. The price broke below the lower boundary of the wedge. It is bearish with a downside price target projected at 3000.
US Treasury Bond in 3-Month Descending Broadening Wedge Pattern
The 30-year U.S. treasury bond index is forming a 3-month descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
US Dollar Broke above 2.5-Month Rising Wedge Pattern
The U.S. dollar index formed a 2.5-month rising wedge pattern. The price has broken above the upper boundary of the wedge. It is bullish with an upside price target projected at 109.
Gold Broke below 7-Week Horizontal Trading Range Pattern
The gold index formed a 7-week horizontal trading range pattern. The price has broken below the lower boundary of the range. It is bearish with a downside price target projected at 1740. This price target has been reached.
Silver Broke below 7-Week Horizontal Trading Range Pattern
The silver index formed a 7-week horizontal trading range pattern. The price has broken below the lower boundary of the range. It is bearish with a downside price target projected at 19.25. This price target has been reached.
Crude Oil in 6-Week Descending Broadening Wedge Pattern
The crude oil index is forming a 6-week descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
Asset Class Performance Ranking with US Dollar 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 the US dollar is outperforming and the US treasury bond is underperforming.
Comments (0)
Trackbacks (0)
Leave a comment
Trackback
