[Last weekly analysis.] In the past two weeks the market couldn’t make a new high, and the upside strength has been significantly weakened. The pattern is either reversal or consolidation.
Overview of World Markets and Sectors
From the following charts, US market is pulling back, while EAFE and emerging market outperform US market significantly. Chinese and Japanese markets are also pulling back. We should keep an eye on how EM moves in the following several weeks.
The next chart shows the MSCI World/EAFE/Emerging Market, Shanghai Stock Exchange Composite Index, Hang Seng Index, and Nikkei 225 index. The world market is heading higher in general while the Asian markets are stalling.
Major indices, commodities, and US dollar are shown in the next chart. Stock markets are pulling back in the past week, gold is rising, commodities are still doing well thanks to tanking US dollar.
Sector overview chart. Technology and industrials are leading the downtrend, while financials are still supported by MA20.
SPX/ES Wave counting
The intermediate term down trend has been confirmed this week. Most likely the market is in wave 2 of C, and this corrective wave may bring the market down to 871 or 839.
On the following P&F chart we can see that: 1) the key support level is at 875-880; 2) if the next rally cannot reach 920 or higher, the uptrend will be confirmed to be over.
XLF and SKF
The chart pattern is consolidation and the future direction is undecided, while the waves shows a potential deeper correction.
Currency Futures and Forex
EUR/USD: uptrend will likely continue after a small correction.
USD/CAD: may bounce back up.
USD/SGD: may bounce back up for a while.
Commodities
Crude oil: uptrend will continue.
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