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11/13/2022 – Market Update

November 14, 2022 Leave a comment Go to comments

 

S&P 500 Broke above 89-Day EMA

 

The stock market advanced powerfully last week. The S&P 500 index broke above its 89-day exponential moving average (EMA), and now it is in a minor a-b-c three-wave sequence of intermediate upward wave (2). Oil Equipment, Energy, and Biotech were ranked as the top three sectors with mostly strong technical strengths. Gold and silver turned bullish after the US dollar pulled back into a correction. The broad stock market is projected to be in a short-term neutral time-window until 11/28/2022.

 
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Broad Market in Short-Term Neutral Time-Window


 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 10 on Friday 11/11/2022 (down from 40 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 11/28/2022.

 

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: 12/9/2022
Broad Market Instability Index (BIX): 10, 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 Telecommunication, Internet, and Technology.

 

 

 
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. Based on recent market movement, the S&P 500 index is still in intermediate upward wave (2), and it is going to have minor a-b-c three-wave sequence. Currently it is in minor upward wave a, and minor downward wave b will be the next.

 

The S&P 500 index is forming a 1-month rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.

 


 
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 upward wave (2).

 


 
India Bombay Index in 7-Week Rising Wedge Pattern


 

The India Bombay Stock Exchange 30 Sensex index is forming a 7-week rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.

 


 
Shanghai Composite Index: Intermediate-Term Pictures


 

The Shanghai Stock Exchange Composite index formed a 6-week descending broadening wedge pattern on daily chart. The price breaks above the upper boundary of the wedge. It is bullish with an upside price target projected at 3200.

 

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 1-Year Downtrend Channel Pattern


 

The 30-year U.S. treasury bond index is forming a 1-year downtrend channel pattern. It is bearish before the price breaks above the upper boundary of the channel.

 

 
US Dollar Broke below 7-Week Descending Triangle Pattern


 

The U.S. dollar index formed a 7-week descending triangle pattern. The price broke below the lower boundary of the triangle last week. It is bearish with a downside price target projected at 107. This price target has been quickly reached.

 


 
Gold Broke above 2-Month Horizontal Trading Range Pattern


 

The gold index formed a 2-month horizontal trading range. The price broke above the upper boundary of the range last week. It is bullish with an upside price target projected at 1820.

 

 
Silver Broke above 6-week Horizontal Trading Range Pattern


 

The silver index formed a 6-week horizontal trading range. The price broke above the upper boundary of the range last week. It is bullish with an upside price target projected at 22.6.

 

 
Crude Oil in 7-week Ascending Triangle Pattern


 

The crude oil index is forming a 7-week ascending triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
Asset Class Performance Ranking with Equity 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. Equity is outperforming and US treasury bond is underperforming.

 

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