Stock Market Drifted Higher

The stock market drifted higher last week. Semiconductors, Oil Equipment, and Consumer Goods sectors ranked as the top three sectors with mostly strong technical strengths. Both the US dollar and gold declined sharply while crude oil broke out to the upside last week. The 30-year US treasury bond is going to test the upside resistance of its downtrend channel.

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 7 on Friday 11/27/2020 (up from 3 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 bearish time-window until 12/11/2020.

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: downward

Date of Next Cycle Low: 12/11/2020

Broad Market Instability Index (BIX): 7, 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 SemiconductorsOil Equipment, and Consumer Goods. Underperforming sectors are Precious MetalsUtilities, and Real Estate.

S&P 500 Index in Primary Upward Wave X

As shown in the weekly chart below, since October of 2018, the SPX has been in a primary corrective wave [W][X][Y] sequence. Primary flat wave [W] ended late March, and primary upward wave [X] has started. Primary upward wave [X] is going to have intermediate (a)(b)(c) three-wave sequence. Currently, it is in intermediate corrective wave (b).

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