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06/04/2023 Market Update
June 4, 2023
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S&P 500 at Another 9-Month High
The stock market rallied on Friday as the U.S. Congress passed debt ceiling bill. The S&P 500 index ended at another 9-month high. Semiconductors, Technology, 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 6/8/2023.
Table of Contents
- Broad Market in Short-Term Bullish Time-Window
- Sector Performance Ranking with Semiconductors Leading
- S&P 500 Index in Primary Corrective Wave A
- German DAX Index: Elliott Wave
- India Bombay Index in 2.5-Month Rising Wedge Pattern
- Shanghai Composite Index: Intermediate-Term Pictures
- US Treasury Bond in 7-Month Broadening Symmetrical Triangle Pattern
- US Dollar Broke below 4-Week Rising Wedge Pattern
- Gold Broke below 6-Week Horizontal Trading Range Pattern
- Crude Oil in 4-Week Ascending Triangle 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 8 on Friday 6/2/2023 (down from 32 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 6/8/2023.
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: 6/8/2023
Broad Market Instability Index (BIX): 8, 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, Technology, and Home Construction. Underperforming sectors are Telecommunication, Utilities, and Energy.
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 5-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 2-month falling wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
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 7-Month Broadening Symmetrical Triangle Pattern
The 30-year U.S. treasury bond index is forming a 7-month broadening symmetrical triangle pattern. It is neutral before the price breaks out from the triangle.
US Dollar Broke below 4-Week Rising Wedge Pattern
The U.S. dollar index formed a 4-week rising wedge pattern. The price broke below the lower boundary of the wedge last week. It is bearish with a downside price target projected at 102.75.
Gold in 4-Week Falling Wedge Pattern
The gold index is forming a 4-week falling wedge pattern. It is bearish before the price breaks above the upper boundary of the wedge.
Silver Broke above 4-Week Falling Wedge Pattern
The silver index formed a 4-week falling wedge pattern. The price broke above the upper boundary of the wedge last week. It is bullish with an upside price target projected at 24.5.
Crude Oil in 1-Month Broadening Triangle Pattern
The crude oil index is forming a 1-month broadening 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.
