03/12/2023 – Market Update
SVB Market Turmoil
The stock market tumbled as SVB fallout triggered selloff last week. The market volatility jumped and readings of our Broad Market Instability index surged above the panic threshold level. Real Estate, Telecommunication, and Utilities are ranked as the three worst sectors with mostly weak technical strengths. The broad stock market is projected to be in a short-term neutral time-window until 3/17/2023.
Table of Contents
- Broad Market in Short-Term Neutral Time-Window
- Sector Performance Ranking with Home Construction Leading
- S&P 500 Index in Primary Corrective Wave A
- German DAX Index: Elliott Wave
- India Bombay Index in 2.5-Month Broadening Symmetrical Triangle Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 3.5-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 Neutral Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 249 on Friday 3/10/2023 (up from 12 the previous week) which is above the panic threshold level of 42 and indicates a bearish market. The Wilshire 5000 index is below the 89-day exponential moving average, and the momentum is negative. 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 3/17/2023.
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: downward
Date of Next Cycle Low: 3/22/2023
Broad Market Instability Index (BIX): 249, above the panic threshold (bearish)
Momentum Indicator: negative (bearish)
Sector Performance Ranking with Home Construction 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 Home Construction, Oil Equipment, and Semiconductors. Underperforming sectors are Real Estate, Telecommunication, and Utilities.
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 formed a 5-month rising wedge pattern. The price broke below the lower boundary of the wedge last week. It is bearish with a downside price target projected at 3800.
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 2.5-Month Broadening Symmetrical Triangle Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 2.5-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 is forming a 2-month ascending broadening triangle pattern. It is neutral before the price breaks out from the triangle.
In the following weekly chart, the Shanghai Stock Exchange Composite index is forming a 5-month rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.
US Treasury Bond in 3-Month Broadening Symmetrical Triangle Pattern
The 30-year U.S. treasury bond index is forming a 3.5-month broadening symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.
US Dollar in 3-Week Broadening Symmetrical Triangle Pattern
The U.S. dollar index is forming a 3-week broadening symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.
Gold in 3-Week Ascending Triangle Pattern
The gold index is forming a 3-week ascending triangle pattern. It is bullish before the price breaks below the lower boundary of the triangle.
Silver in 1.5-Month Falling Wedge Pattern
The silver index is forming a 1.5-month falling wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
Crude Oil in 3.5-Month Ascending Triangle Pattern
The crude oil index is forming a 3.5-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 equity is underperforming.
Comments (0)
Trackbacks (0)
Leave a comment
Trackback
