Today the Utilities Sector (XLU) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. This is the seventh 20/50EMA crossover in the last year, so as usual on signals for other sectors, it is a whipsaw associated with a trading range until we see evidence otherwise.
The DecisionPoint Alert Weekly Wrap presents an end-of-week assessment of the trend and condition of the Stock Market, the U.S. Dollar, Gold, Crude Oil, and Bonds. The DecisionPoint Alert daily report (Monday through Thursday) is abbreviated and gives updates on the Weekly Wrap assessments.
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MAJOR MARKET INDEXES
For Today:
For the Week:
SECTORS
Each S&P 500 Index component stock is assigned to one of 11 major sectors. This is a snapshot of the Intermediate-Term (Silver Cross) and Long-Term (Golden Cross) Trend Model signal status for those sectors.
For Today: 
For the Week:
CLICK HERE for Carl's annotated Market Index, Sector, and Industry Group charts.
THE MARKET (S&P 500)
IT Trend Model: BUY as of 3/30/2023
LT Trend Model: BUY as of 3/29/2023
SPY Daily Chart: We were expecting low volatility on Thursday and Friday because of options expiration, and we think that expectation was met. SPY had a no change day, and the S&P 500 was up only +0.03%. The daily PMO has topped.
SPX Total Volume was +30% higher than the one-year daily average. This was not a by product of options expiration because this was no an end-of-quarter expiration month. The high volume has to do with normal trading, which apparently was not normal today. Perhaps it was blowoff volume associated with topping.
SPY Weekly Chart: The rising trend is becoming very steep, parabolic, as price approaches new, all-time high. As you know, we point out that parabolic advances beg for correction, which could happen before or shortly after record highs are made.
New 52-Week Highs/Lows: While new highs expanded today, their down trend remains intact.
Climax Analysis: There were no climax readings today.
*A climax is a one-day event when market action generates very high readings in, primarily, breadth and volume indicators. We also include the VIX, watching for it to penetrate outside the Bollinger Band envelope. The vertical dotted lines mark climax days -- red for downside climaxes, and green for upside. Climaxes are at their core exhaustion events; however, at price pivots they may be initiating a change of trend.
Short-Term Market Indicators: The short-term market trend is UP and the condition is OVERBOUGHT.
The STOs expanded today, but their trend id still down.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERBOUGHT.
The ITBM and ITVM expanded as price topped, but they are overbought.
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PARTICIPATION and BIAS Assessment: The following table objectively shows the depth and trend of participation in two time frames.
- Intermediate-Term - the Silver Cross Index (SCI) shows the percentage of SPX stocks on IT Trend Model BUY signals (20-EMA > 50-EMA). The opposite of the Silver Cross is a "Dark Cross" -- those stocks are, at the very least, in a correction.
- Long-Term - the Golden Cross Index (GCI) shows the percentage of SPX stocks on LT Trend Model BUY signals (50-EMA > 200-EMA). The opposite of a Golden Cross is the "Death Cross" -- those stocks are in a bear market.
The following table summarizes participation for the major market indexes and sectors. The 1-Week Change columns inject a dynamic aspect to the presentation. There are three groups: Major Market Indexes, Miscellaneous Sectors, and the eleven S&P 500 Sectors.
NEW SECTORS ADDED! We have begun collecting SCI and GCI data for four new sectors: Biotechnology (IBB), Regional Banking (KRE), Retail (XRT), and Semiconductor (SMH).
With few exceptions, participation increased, as the SCIs and GCIs moved higher. IT Bias were mostly strong plus numbers.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
SCI values of 50 or higher are considered bullish, and only two indexes had values lower than that.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
GCI values of 50 or higher are considered bullish, and only six indexes had values lower than that.
The following chart objectively shows the depth and trend of participation in three time frames.
The overall market bias is BULLISH.
The short-term bias is BULLISH.
The intermediate-term bias is BULLISH.
The long-term bias is BULLISH.
The trend from the October low is up, and participation is at bullish levels. Because the readings on these charts don't tend to linger at one level, participation is high enough to be concerned about a price reversal; however, there is still room for more improvement if the up trend continues.
CONCLUSION: Options expiration was accomplished with low volatility, but with higher volume than expected. For the present, we are assuming that the high volume is associated with a blowoff as price approaches all-time highs. While the trend in all time frames is up, the market is overbought. The weekly chart shows the market being in a parabolic rise, which usually doesn't end well.
We can see by the signal tables at the beginning of this commentary that out of 38 intermediate- and long-term signals, all but two are on a BUY. This is bullish, but it is also approaching the point where things will be as good as they will get. When that happens, things start moving back down to where things will be as bad as they are going to get. We don't think it is time to panic, but be sure to tend your stops.
Calendar: Next week is Fed week with the interest rate announcement on Wednesday. Expecting an increase of 25 basis points.
Erin is 50% long, 0% short.
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BITCOIN
The juice from the news that drove Bitcoin higher over the last month seems to have run its course.
This chart is to show where some of the support/resistance lines come from.
INTEREST RATES
Waiting for the Fed meeting next week.
The Yield Curve Chart from StockCharts.com shows us the inversions taking place. The red line should move higher from left to right. Inversions are occurring where it moves downward.
10-YEAR T-BOND YIELD
We are currently looking at a bullish saucer formation, which is bullish, and from which a handle should emerge. But wait for the Fed announcement next week before placing any bets.
MORTGAGE INTEREST RATES (30-Yr)**
**We watch the 30-Year Fixed Mortgage Interest Rate, because, for the most part, people buy homes based upon the maximum monthly payment they can afford. As rates rise, a fixed monthly payment will carry a smaller mortgage amount. As buying power has been shrinking, home prices have come under pressure.
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This week the 30-Year Fixed Rate changed from 6.96 to 6.78.
BONDS (TLT)
IT Trend Model: SELL as of 5/16/2023
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: Bonds are struggling ans no doubt waiting for the Fed.
We note that price has failed to reach the top of the trading range for about three months.
TLT Weekly Chart: TLT is clearly in a down trend in this time frame. The weekly PMO has leveled below the zero line, showing steady down pressure on price.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 7/13/2023
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar is rising off the July low and trying to fill last week's gap.
UUP is still trapped in the trading range.
UUP Weekly Chart: The Dollar is consolidating after a break down from a parabolic advance. The weekly PMO is falling below the signal line. Bearish outlook.
GOLD
IT Trend Model: NEUTRAL as of 6/8/2023
LT Trend Model: BUY as of 1/5/2023
GOLD Daily Chart: GLD is still working in forming a handle for the short-term saucer. Note that the 20-day EMA is close to crossing up through the 50-day EMA, which would be intermediate-term bullish.
The PMO is rising and is at the zero line. Gold still has a bullish bias.
GOLD Weekly Chart: Gold is only about 6% below the all-time high. We think that the current push upward may set new, all-time highs.
GOLD MINERS Golden and Silver Cross Indexes: Price moves in Gold tend to be amplified in the Gold Miners, so this week's pullback seems to be more sticky than Gold's.
CRUDE OIL (USO)
IT Trend Model: BUY as of 7/12/2023
LT Trend Model: SELL as of 12/6/2022
USO Daily Chart: Price is being squeezed up against overhead resistance by the rising trend line. The flat line is the weakest.
In the bigger picture we see a triangle formation, and the top of the triangle coincides with the overhead resistance.
USO/$WTIC Weekly Chart: The longer-term rising trend line reinforces the horizontal support in this time frame.
Good Luck & Good Trading!
Erin Swenlin And Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
NOTE: The signal status reported herein is based upon mechanical trading model signals, specifically, the DecisionPoint Trend Model. They define the implied bias of the price index based upon moving average relationships, but they do not necessarily call for a specific action. They are information flags that should prompt chart review. Further, they do not call for continuous buying or selling during the life of the signal. For example, a BUY signal will probably (but not necessarily) return the best results if action is taken soon after the signal is generated. Additional opportunities for buying may be found as price zigzags higher, but the trader must look for optimum entry points. Conversely, exit points to preserve gains (or minimize losses) may be evident before the model mechanically closes the signal.
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