03/05/2023 – Market Update
Stocks Held above 89-Day Exponential Moving Average
The stock market bounced from 3-week-long decline last week. Oil Equipment, Materials, and Home Construction were ranked as the top three sectors with mostly strong technical strengths. The broad stock market is projected to be in a short-term bullish time-window until 3/20/2023.
Table of Contents
- Broad Market in Short-Term Bullish Time-Window
- Sector Performance Ranking with Oil Equipment Leading
- S&P 500 Index in Primary Corrective Wave A
- German DAX Index: Elliott Wave
- India Bombay Index in 2-Month Broadening Symmetrical Triangle Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 3-Month Broadening Symmetrical Triangle Pattern
- US Dollar in 1-Week Descending Triangle Pattern
- Gold Broke above 4-Week Falling Wedge Pattern
- Crude Oil in 3-Month Ascending Triangle Pattern
- Asset Class Performance Ranking with Gold Leading
Broad Market in Short-Term Bullish Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 12 on Friday 3/3/2023 (down from 65 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 near zero. 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 3/20/2023.
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: 3/20/2023
Broad Market Instability Index (BIX): 12, below the panic threshold (bullish)
Momentum Indicator: near zero (neutral)
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, Materials, and Home Construction. Underperforming sectors are Utilities, Telecommunication, 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 starting intermediate downward wave (3), and it is going to have minor 1-2-3-4-5 five-wave sequence. Currently it is in minor downward wave 1.
The S&P 500 index is forming a 5-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 Broadening Symmetrical Triangle Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 2-month broadening symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.
Shanghai Composite Index: Intermediate-Term Pictures
The Shanghai Stock Exchange Composite index formed a 5-week horizontal trading range between 3220 and 3300. The price broke above the upper boundary of the range. It is bullish with an upside price target projected at 3400.
In the following weekly chart, the Shanghai Stock Exchange Composite index formed a 1-year 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 3400.
US Treasury Bond in 3-Month Broadening Symmetrical Triangle Pattern
The 30-year U.S. treasury bond index is forming a 3-month broadening symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.
US Dollar in 1-Week Descending Triangle Pattern
The U.S. dollar index is forming a 1-week descending triangle pattern. It is neutral before the price breaks out from the triangle.
Gold Broke above 4-Week Falling Wedge Pattern
The gold index formed a 4-week falling wedge pattern. The price broke above the upper boundary of the wedge last week. It is bullish with an upside price target projected at 1900.
Silver Broke above 4-Week Falling Wedge Pattern
The silver index formed a 4-week falling wedge pattern. The price broke above the upper boundary of the wedge last week. It is bullish with an upside price target projected at 22.
Crude Oil in 3-Month Ascending Triangle Pattern
The crude oil index is forming a 3-month ascending triangle pattern. It is neutral before the price breaks out from the triangle.
Asset Class Performance Ranking with Gold 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. Gold is outperforming and the US treasury bond is underperforming.
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