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05/29/2023 – Market Update

May 30, 2023 Leave a comment

 

Choppy Market

 

The stock market paced back and forth as the US was reaching its debt limit last week. Semiconductors, Technology, and Internet 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 5/31/2023.

 
Table of Contents

 

 

Broad Market in Short-Term Bullish Time-Window

 

The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 32 on Friday 5/26/2023 (up from 12 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 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 5/31/2023.

 

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: 5/31/2023
Broad Market Instability Index (BIX): 32, below the panic threshold (bullish)
Momentum Indicator: negative (bearish)

 

 
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, Technology, and Internet. Underperforming sectors are Energy, Oil Equipment, and Utilities.

 

 

 
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 6-week 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 in 2.5-Month Rising Wedge Pattern

 

The India Bombay Stock Exchange 30 Sensex index is forming a 2.5-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 4-month ascending broadening triangle pattern. The price broke below the lower boundary last week. It is bearish with a downside price target projected at 3155.

 

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 in 4-Week Rising Wedge Pattern

 

The U.S. dollar index is forming a 4-week rising wedge pattern. It is bullish before the price breaks below the lower boundary of the wedge.

 


 
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. This price target has been reached.

 

 
Silver in 4-Week Falling Wedge Pattern

 

The silver index is forming a 4-week falling wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.

 

 
Crude Oil in 4-Week Ascending Triangle Pattern

 

The crude oil index is forming a 4-week ascending triangle pattern. It is neutral before the price breaks out from the triangle.

 


 
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.