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05/07/2023 – Market Update

 

Volatile Market

 

The stock market was volatile last week. Oil Equipment, Energy, and Telecommunication was 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 5/10/2023.

 
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Broad Market in Short-Term Neutral Time-Window


 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 36 on Friday 5/5/2023 (down from 42 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 neutral time-window until 5/10/2023.

 

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: 5/26/2023
Broad Market Instability Index (BIX): 36, below the panic threshold (bullish)
Momentum Indicator: slightly negative (neutral)

 

 
Sector Performance Ranking with Precious Metals 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 Precious Metals, Home Construction, and Technology. 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 abcde.

 

The S&P 500 index is forming a 5-week symmetric triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
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. This price target has been reached.

 


 
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 7-Week Descending Broadening Wedge Pattern


 

The U.S. dollar index is forming a 7-week descending broadening wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.

 


 
Gold in 5-Week Horizontal Trading Range Pattern


 

The gold index is forming a 5-week horizontal trading range between 1990 and 2060. It is neutral before the price breaks out from the range.

 

 
Silver in 5-Week Rising Wedge Pattern


 

The silver index is forming a 5-week rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.

 

 
Crude Oil in 4-Week Descending Broadening Wedge Pattern


 

The crude oil index is forming a 4-week descending broadening wedge pattern. It is bearish before the price breaks above the upper 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 oil is underperforming.

 

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