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07/31/2022 – Market Update

August 1, 2022 Leave a comment

 

S&P 500 Moved Back above EMA 89

 

The stock market continued to advance last week. The S&P 500 index crossed above its 89-day exponential moving average. Energy, Utilities, and Oil Equipment 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 7/29/2022 (unchanged from 8 the previous week) which is below the panic threshold level of 42 and indicates a bullish market. The Wilshire 5000 index is 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 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: 08/24/2022
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 Oil Equipment. Underperforming sectors are Internet, Precious Metals, 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] has ended, and now it is in primary corrective wave [A]. 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).

 

The S&P 500 index formed a 5-week ascending triangle pattern on the daily chart. The price has broken above the upper boundary (3900) of the triangle. It is bullish with an upside price target projected at 4075. This price target has been reached.

 


 
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 7-Week Ascending Broadening Triangle Pattern

 

The India Bombay Stock Exchange 30 Sensex index is forming a 7-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 is forming a 3-week symmetrical triangle pattern on 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 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 has broken above 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 above 2-Month Descending Broadening Wedge Pattern

 

The gold index formed a 2-month descending broadening wedge pattern. The price broke above the upper boundary of the wedge. It is bullish with an upside price target projected at 1870.

 

 
Silver Broke above 2-Month Descending Broadening Wedge Pattern

 

The silver index formed a 2-month descending broadening wedge pattern. The price broke above the upper boundary of the wedge. It is bullish with an upside price target projected at 22.25.

 

 
Crude Oil in 3-Week Ascending Triangle Pattern

 

The crude oil index is forming a 3-week ascending triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
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.