04/23/2023 – Market Update

April 24, 2023 Leave a comment

Sideways Market

The stock market was in sideways last week. Oil Equipment, Energy, and Telecommunication are ranked as the three worst sectors with mostly weak technical strengths. The broad stock market is projected to be in a short-term bearish time-window until 5/5/2023.

Table of Contents

Broad Market in Short-Term Bearish 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 Broke above 1.5-Month Descending Broadening Wedge Pattern
Shanghai Composite Index: Intermediate-Term Pictures
US Treasury Bond in 5-Month Broadening Symmetrical Triangle Pattern
US Dollar in 5-Week Descending Broadening Wedge Pattern
Gold Broke below 5-Week Rising Wedge Pattern
Crude Oil in 6-Week Ascending Broadening Wedge Pattern
Asset Class Performance Ranking with Gold Leading

Broad Market to be in Short-Term Bearish Time-Window

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 22 on Friday 4/21/2023 (up from 14 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 slightly negative. Based on the forecast of the Leading Wave Index (LWX), the broad stock market is projected to be in a short-term bearish time-window until 5/5/2023.

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: 5/5/2023

Broad Market Instability Index (BIX): 22, below the panic threshold (bullish)

Momentum Indicator: slightly negative (neutral)

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, Precious Metals, and Semiconductors. Underperforming sectors are Oil Equipment, Energy, and Telecommunication.

S&P 500 Index in Primary Corrective Wave A

As shown in the weekly chart below, since January of 2022, the SPX has been in a primary corrective wave [A] with an intermediate (1)–(2)–(3)–(4)–(5) five-wave sequence. Currently it is in intermediate upward wave (2) with a minor wave sequence of a–b–c–d–e.

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 Broke above 1.5-Month Descending Broadening Wedge Pattern

The India Bombay Stock Exchange 30 Sensex index formed a 1.5-month 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 61500.

Shanghai Composite Index: Intermediate-Term Pictures

The Shanghai Stock Exchange Composite index is forming a 3-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 6-month rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.

US Treasury Bond in 5-Month Broadening Symmetrical Triangle Pattern

The 30-year U.S. treasury bond index is forming a 5-month broadening symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.

US Dollar in 5-Week Descending Broadening Wedge Pattern

The U.S. dollar index is forming a 5-week descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.

Gold Broke below 5-Week Rising Wedge Pattern

The gold index formed a 5-week rising wedge pattern. The price broke below the lower boundary of the wedge. It is bearish with a downside price target projected at 1950.

Silver Broke below 1.5-Month Rising Wedge Pattern

The silver index formed a 1.5-month rising wedge pattern. The price broke below the lower boundary of the wedge. It is bearish with a downside price target projected at 24.

Crude Oil in 6-Week Ascending Broadening Wedge Pattern

The crude oil index is forming a 6-week ascending broadening wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.

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 dollar is underperforming.