05/21/2023 – Market Update
S&P 500 at 9-Month High
The S&P 500 index broke above a 6-week trading range pattern and reached its 9-month high last week. Home Construction, Technology, and Semiconductors 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 5/26/2023.
Table of Contents
- Broad Market in Short-Term Bullish 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-Month Rising Wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 6-Month Broadening Symmetrical Triangle Pattern
- US Dollar Broken above 2-Month Descending Broadening Wedge Pattern
- Gold Broke below 6-Week Horizontal Trading Range Pattern
- Crude Oil Broke above 5-Week Descending Broadening Pattern
- Asset Class Performance Ranking with Equity 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 5/19/2023 (down from 72 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 bullish time-window until 5/26/2023.
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): 12, 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, Technology, 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 7-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 in 2-Month Rising Wedge Pattern
The India Bombay Stock Exchange 30 Sensex index is forming a 2-month rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.
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 formed a 6-month rising wedge pattern. The price has broken below the lower boundary of the wedge. It is bearish with a downside price target projected at 3150.
US Treasury Bond in 6-Month Broadening Symmetrical Triangle Pattern
The 30-year U.S. treasury bond index is forming a 6-month broadening symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.
US Dollar Broken above 2-Month Descending Broadening Wedge Pattern
The U.S. dollar index formed a 2-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 103.75.
Gold Broke below 6-Week Horizontal Trading Range Pattern
The gold index formed a 6-week horizontal trading range between 1990 and 2060. The price has broken below the lower boundary of the range. It is bearish with a downside price target projected at 1950.
Silver Broke below 6-Week Rising Wedge Pattern
The silver index formed a 6-week rising wedge pattern. The price has broken below the lower boundary of the wedge. It is bearish with a downside price target projected at 23.7. This price target has been reached.
Crude Oil Broke above 5-Week Descending Broadening Wedge Pattern
The crude oil index formed a 5-week 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 74.
Asset Class Performance Ranking with Equity 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. Equity is outperforming and oil is underperforming.
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