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04/02/2023 – Market Update

 

Stocks in Short-Term Upward Wave

 

The S&P 500 index advanced above its 89-day exponential moving average last week. The stock market was in a short-term upward wave with a very low market volatility. Semiconductors, Precious Metals, 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 4/5/2023.

 
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Broad Market in Short-Term Bullish Time-Window


 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 2 on Friday 3/31/2023 (down from 105 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 bullish time-window until 4/5/2023.

 

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: upward
Date of Next Cycle High: 4/5/2023
Broad Market Instability Index (BIX): 2, below the panic threshold (bullish)
Momentum Indicator: positive (bullish)

 

 
Sector Performance Ranking with Semiconductors 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 Semiconductors, Precious Metals, and Home Construction. Underperforming sectors are Financials, Banks, and Pharmaceuticals.

 

 

 
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 upward wave 2.

 

The S&P 500 index formed a 1.5-month descending broadening wedge pattern. The price broke above the upper boundary of the wedge last week. It is bullish with an upside price target projected at 4180.

 


 
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 1.5-Month Descending Broadening Wedge Pattern


 

The India Bombay Stock Exchange 30 Sensex index is forming a 1.5-month descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.

 


 
Shanghai Composite Index: Intermediate-Term Pictures


 

The Shanghai Stock Exchange Composite index is forming a 1-month dscending 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 4-Month Broadening Symmetrical Triangle Pattern


 

The 30-year U.S. treasury bond index is forming a 4-month broadening symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.

 

 
US Dollar in 5-Week Falling Wedge Pattern


 

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

 


 
Gold in 2-Week Ascending Triangle Pattern


 

The gold index is forming a 2-week ascending triangle pattern. It is neutral before the price breaks out from the triangle.

 

 
Silver Broke above 2-Month Falling Wedge Pattern


 

The silver index formed a 2-month falling wedge pattern. The price has broken above the upper boundary of the wedge. It is bullish with an upside price target projected at 23. This price target has been reached.

 

 
Crude Oil Broke below 3.5-Month Ascending Triangle Pattern


 

The crude oil index formed a 2-month descending 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 dollar is underperforming.

 

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