12/04/2022 – Market Update
Stocks at the Peak of Short-Term Upward Wave
The stock market slightly up last week with a very low market volatility. Biotech, Oil Equipment, and Healthcare were ranked as the top three sectors with mostly strong technical strengths. The S&P 500 index is in a 2-month rising wedge pattern, and is at the peak of its short-term upward wave. The broad stock market is projected to be in a short-term neutral time-window until 12/8/2022.
Table of Contents
- Broad Market in Short-Term Neutral Time-Window
- Sector Performance Ranking with Biotech Leading
- S&P 500 Index in Primary Corrective Wave A
- German DAX Index: Elliott Wave
- India Bombay Index in 2-Month Uptrend Channel Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 1-Year Downtrend Channel Pattern
- US Dollar in 2-Month Falling Wedge Pattern
- Gold in 2-Month Rising Wedge Range Pattern
- Crude Oil in 2-Month Descending Triangle Pattern
- Asset Class Performance Ranking with Equity Leading
Broad Market in Short-Term Neutral Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 4 on Friday 12/2/2022 (up from 3 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 12/8/2022.
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: 12/20/2022
Broad Market Instability Index (BIX): 4, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)
Sector Performance Ranking with Biotech 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 Biotech, Oil Equipment, and Healthcare. Underperforming sectors are Telecommunication, Internet, and Real Estate.
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 2-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 2-Month Uptrend Channel Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 2-month uptrend channel pattern. It is bullish before the price breaks below the lower boundary of the channel.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index is forming a 6-week rising wedge pattern on daily chart. It is bullish before the price breaks below the lower boundary of the wedge.
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 in 2-Month Falling Wedge Pattern
The U.S. dollar index is forming a 2-month falling wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
Gold in 2-Month Rising Wedge Range Pattern
The gold index is forming a 2-month rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.
Silver in 2-Month Rising Wedge Pattern
The silver index is forming a 2-month rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.
Crude Oil in 2-Month Descending Triangle Pattern
The crude oil index is forming a 2-month descending 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 oil is underperforming.
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