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07/24/2022 – Market Update

July 24, 2022 Leave a comment

 

Watch Out Resistance at EMA 89

 

The stock market advanced last week. The S&P 500 index tested the resistance 3900 and broke above it. The next resistance for the S&P 500 index will be at the 89-day exponential moving average (EMA 89) around 4050. Energy, Utilities, and Pharmaceuticals 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 8/3/2022.

 
Table of Contents

 

 

Broad Market in Short-Term Neutral Time-Window

 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 8 on Friday 7/22/2022 (down from 15 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 neutral time-window until 8/3/2022.

 

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: 08/19/2022
Broad Market Instability Index (BIX): 8, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)

 

 
Sector Performance Ranking with Energy 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 Energy, Utilities, and Pharmaceuticals. Underperforming sectors are Precious Metals, Internet, and Telecommunication.

 

 

 
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 formed a 5-week ascending triangle pattern on the daily chart. The price broke above the upper boundary (3900) of the triangle last week. It is bullish with an upside price target projected at 4075.

 


 
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 in 6-Week Ascending Broadening Triangle Pattern

 

The India Bombay Stock Exchange 30 Sensex index is forming a 6-week ascending broadening triangle pattern. It is bullish as long as the price is above the lower boundary of the triangle.

 


 
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 has broken below the lower boundary of the wedge. It is bearish with a downside price target projected at 3000.

 


 
US Treasury Bond Broke above 3-Month Descending Broadening Wedge Pattern

 

The 30-year U.S. treasury bond index formed a 3-month descending broadening wedge pattern. The price breached the upper boundary of the wedge. It is bullish with an upside price target projected at 149.

 


 
US Dollar in 2-Month Ascending Broadening Wedge Pattern

 

The U.S. dollar index is forming a 2-month ascending broadening wedge pattern. It is bullish as long as the price is above the lower boundary of the wedge.

 


 
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 7-Week Descending Broadening Wedge Pattern

 

The crude oil index is forming a 7-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 gold is underperforming.

 

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