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06/18/2023 – Market Update
June 19, 2023
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S&P 500 at 13-Month High
The broad-based rally of stocks continued last week. The S&P 500 index hit 13-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 bearish time-window until 7/11/2023.
Table of Contents
- Broad Market in Short-Term Bearish 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-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 in 1.5-Month Descending Broadening Wedge Pattern
- Crude Oil in 1.5-Month Broadening Triangle Pattern
- Asset Class Performance Ranking with Equity Leading
Broad Market to be in Short-Term Bearish Time-Window
The Broad Market Instability Index (BIX), measured from over 8000 U.S. stocks, closed at 4 on Friday 6/16/2023 (up from 3 the previous week) which is below the panic threshold level of 42 and indicates a bullish market. The S&P 500 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 bearish time-window until 7/11/2023.
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 S&P 500 index with both the BIX and the Momentum indicators. The current market status is summarized as follows:
Short-Term Cycle: peak
Date of Next Cycle Low: 7/11/2023
Broad Market Instability Index (BIX): 4, 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 Energy, Utilities, and Pharmaceuticals.
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-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 formed a 2-month falling wedge pattern. The price broke above the upper boundary of the wedge. It is bullish with an upside price target projected at 3320.
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 has broken below the lower boundary of the wedge. It is bearish with a downside price target projected at 102.75. This target has been reached.
Gold in 1.5-Month Descending Broadening Wedge Pattern
The gold 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.
Silver Broke above 4-Week Falling Wedge Pattern
The silver index formed a 4-week falling wedge pattern. The price has broken above the upper boundary of the wedge. It is bullish with an upside price target projected at 24.5.
Crude Oil in 1.5-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 US treasury bond is underperforming.
