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10/30/2022 – Market Update

October 31, 2022 Leave a comment

 

S&P 500 Testing 89-Day Exponential Moving Average

 

The stock market advanced last week. Oil Equipment, Energy, and Biotech were ranked as the top three sectors with mostly strong technical strengths. The S&P 500 index reached its 89-day exponential moving average, and it is currently in upward minor wave 2 of the downward 1-2-3-4-5 five-wave sequence. The US dollar, gold and silver are neutral while the 30-year U.S. treasury bond is bearish. The broad stock market is projected to be in a short-term bullish time-window until 11/2/2022.

 
Table of Contents

 

 

Broad Market in Short-Term Bullish Time-Window

 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 23 on Friday 10/28/2022 (down from 53 the previous week) which is below the panic threshold level of 42 and indicates a bullish market. The Wilshire 5000 index is right at 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 11/2/2022.

 

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: 11/2/2022
Broad Market Instability Index (BIX): 23, 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 Biotech. Underperforming sectors are Precious Metals, Internet, and Semiconductors.

 

 

 
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. Intermediate downward wave (3) has started, and it will have minor 1-2-3-4-5 five-wave sequence. Currently it is in minor upward wave 2, and minor downward wave 3 will be the next.

 

The S&P 500 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 3800. This 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 Broke above 4-Week Descending Broadening Wedge Pattern

 

The India Bombay Stock Exchange 30 Sensex index formed a 4-week 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 59500. This price target has been reached.

 


 
Shanghai Composite Index: Intermediate-Term Pictures

 

The Shanghai Stock Exchange Composite index formed a 2.5-month downtrend channel pattern on daily chart. It is bearish before the price breaks above the upper boundary of the channel.

 

In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 1-year descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.

 


 
US Treasury Bond in 10-Month Descending Broadening Wedge Pattern

 

The 30-year U.S. treasury bond index is forming a 10-month descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.

 

 
US Dollar in 6-Week Descending Triangle Pattern

 

The U.S. dollar index is forming a 6-week descending triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
Gold in 2-Month Horizontal Trading Range Pattern

 

The gold index is forming a 2-month horizontal trading range. It is neutral before the price breaks out from the range.

 

 
Silver in 5-week Descending Triangle Pattern

 

The silver index is forming a 5-week descending triangle pattern. It is neutral before the price breaks out from the triangle.

 

 
Crude Oil in 3.5-Month Descending Broadening Wedge Pattern

 

The crude oil index is forming a 3.5-month descending broadening wedge pattern. It is bearish before the price breaks above the 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 US treasury bond is underperforming.