In a very unusual move, the Silver Cross Index turned back up. We say this is unusual because %Stocks > 20/50EMAs readings are lower than the Silver Cross Index. This means that this rise is likely to fail very soon.
The Golden Cross Index also turned up today. It looks very toppy, but we do have the participation to support it moving higher, at least for a bit longer. This is because %Stocks > 50/200EMAs are reading higher than the Golden Cross Index. This could lift 50-day EMAs above 200-day EMAs.
In any case, we think this is coming too late to look for follow through, particularly on the Silver Cross Index. Remember that the Silver Cross Index is still below its signal line so the IT Bias remains BEARISH. The Golden Cross Index is above its signal line so the LT Bias is still reading as BULLISH.
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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MARKET/SPX SECTOR/INDUSTRY GROUP INDEXES
Change Today: 
Change 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 11/14/2023
LT Trend Model: BUY as of 3/29/2023
SPY Daily Chart: The market finished lower on the day but still managed a new all-time high intraday. The PMO is still holding above its signal line, but the RSI is overbought. Notice that the SPY is seeing a decline in relative strength against the equal-weight RSP. This tells us that leadership mega-caps are losing ground. They have kept the market elevated and losing their leadership will likely weight heavy on the market.
The VIX finished near its lows for the day so it closed above it moving average on the inverted scale. This implies some internal strength. Stochastics continue to flash strength as they oscillate above 80. These indicators do suggest the rally might continue a bit longer.
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SPY Weekly Chart: The market is marching ever higher, but we note that the RSI has moved into overbought territory. So on both the daily and the weekly chart we know that the market is overbought. The weekly PMO is still rising which is positive for the intermediate term.
New 52-Week Highs/Lows: New Highs have given us another negative divergence and the 10-DMA of the High-Low Differential is topping.
Climax Analysis: There were no climax readings today. Yesterday's upside exhaustion climax did portend lower prices for the day and that did come true.
*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 NEUTRAL.
The Swenlin Trading Oscillators (STOs) both turned down today which does not bode well for next week. Negative divergences are all over this chart. As expected we did lose stocks with rising momentum today. %Stocks > 20EMA held steady.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM and ITVM both rose on the day so we aren't seeing quite the same deterioration as on our short-term indicators. One thing to note is the new negative divergences on these two indicators. We did see a slight expansion in the number of PMO BUY Signals.
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PARTICIPATION: The following tables summarize 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 Industry Groups, and the 11 S&P 500 Sectors.
Consumer Staples (XLP) holds the highest IT Bias, but that is likely to fade away given the loss on the SCI. It holds that positive bias because the GCI never really expanded much on the last rally but the SCI did expand on that rally and that is why we have such a high IT Bias.
The lowest Bias belongs to Energy (XLE). This sector was decimated but is now starting to reawaken. It didn't happen soon enough to see the SCI gain, but we like the current rally and expect the SCI to start expanding soon.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
The Transports (IYT) gained 10 percentage points on the SCI this week. This is clearly a group that is clicking in the near term.
Real Estate (XLRE) holds a 100% SCI reading, but this sector is beginning to see price deterioration so we expect the SCI to begin moving back down soon.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
The highest GCI reading belongs to both Financials (XLF) and Semiconductors (SMH). They both saw even more gains this week. This bodes well in the long term. Shorter-term, SMH is showing deterioration on the SCI. We see this group as likely to move lower near-term.
The lowest readings go to both XLP and Biotechs (IBB). Both of these saw deterioration to the SCI so we don't expect to see them improve their GCI for some time.
PARTICIPATION: The following chart 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 short-term market bias is BULLISH.
The intermediate-term market bias is BEARISH.
The long-term market bias is BULLISH.
We are listing the short-term bias as BULLISH given we have %Stocks > 20/50EMAs reading above 50%, but we expect to see more deterioration next week. The SCI is below its moving average so despite rising today, we have a BEARISH IT Bias. The GCI is above its signal line so we have a BULLISH Bias in the long term.
BIAS Assessment: The following table expresses the current BIAS of various price indexes based upon the relationship of the Silver Cross Index to its 10-day EMA (intermediate-term), and of the Golden Cross Index to its 20-day EMA (long-term). When the Index is above the EMA it is bullish, and it is bearish when the Index is below the EMA. The BIAS does not imply that any particular action should be taken. It is information to be used in the decision process.
The items with highlighted borders indicate that the BIAS changed today.
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CONCLUSION: We are troubled by the negative divergences that have popped up on all of our primary indicator charts. While the PMO is still rising on a BUY Signal, we note PMOs within the index overall aren't as strong as they should be given we are in a rally to new all-time highs. We should have more. The other problem is mega-caps are beginning to underperform and most look toppy. These leadership stocks are needed to keep the rally going as we don't see enough strength in the broader market. STOs turned down today and that tells us the market is likely to stumble next week. We would avoid adding to your portfolios while conditions are overbought. Intel (INTC) was a good reminder today that you may not want to hold positions into earnings announcements. We have plenty of stocks reporting right now so check those dates.
Erin is 60% long, 0% short.
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BITCOIN
We were surprised to see a rally on Bitcoin given the bearish look of the indicators yesterday. This forceful rally is getting the PMO to turn back up. The RSI is nearing positive territory already and Stochastics are powering higher. We should see some follow through on today's rally.
This chart is to show where some of the support/resistance lines come from.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields tipped upward today and we would look for them to move even higher next week. Rising trends are intact in the short term. We've identified a higher level of support off this recent reversal.
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
$TNX has been bouncing around sideways this week as it attempts to overcome resistance. The indicators are quite positive. We like the location of the RSI as it is not overbought. The PMO is rising strongly despite the sideways action and Stochastics are rising above 80. Look for the yield to break out next week.
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, which shuts many buyers out of the market, and potential sellers will experience pressure to lower prices (to no effect so far).
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This week the 30-Year Fixed Rate changed from 6.60 to 6.69.
BONDS (TLT)
IT Trend Model: BUY as of 11/28/2023
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: The 50-day EMA is moving lower below the 200-day EMA indicating a bear market configuration on Bonds. The indicators are not seeing any improvement and remain quite bearish. We are bullish on interest rates so we are bearish on Bond funds.
TLT Weekly Chart: We got the breakout from the bullish falling wedge, but price began to weaken shortly thereafter. The weekly RSI has just moved below net neutral (50), but the weekly PMO is still rising, but has definitely decelerated. The 20-year yield looks very bullish right now and that will continue to put downside pressure on TLT.
DOLLAR (UUP)
IT Trend Model: BUY as of 1/23/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar was unchanged on the day. It has been moving sideways. The rising trend is still intact. The PMO is still rising albeit very slowly. The RSI is positive and Stochastics continue to reside above 80. We are bullish on the Dollar, but it sure is taking some time to rally meaningfully.
Overhead resistance was hit and that could be causing problems for price. Ultimately we do expect a breakout.
UUP Weekly Chart: The weekly PMO has turned up giving credence to our bullish stance in the short term. The weekly RSI is positive. Resistance seems to be the issue right now, but we expect it to be overcome.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: We see a symmetrical triangle on the daily chart. These are continuation patterns so we should expect the breakout/breakdown to occur based on the prior trend. In this case prices were rising going into the pattern so we should expect an upside breakout ahead.
It may take some doing as we are bullish on the Dollar right now. It isn't out of the question that the two could travel in tandem, it just isn't a common and the correlation is still very negative so we wouldn't look for that breakout just yet.
GLD Weekly Chart: Discounts are in reversal territory. High discounts often times lead to higher prices for Gold as they imply extreme bearishness among traders. The weekly PMO has topped so we do have to expect lower prices overall for Gold moving into next week.
GOLD MINERS Golden and Silver Cross Indexes: Gold Miners are giving it go by forming a short-term rising trend. We really don't trust this rally. Notice that participation is very weak. %Stocks > 20/50/200EMAs are reading very low and the Silver Cross Index has accelerated its decline. The Golden Cross Index has dropped beneath its signal line this week giving us a LT Bearish Bias. While the rally is somewhat encouraging, we aren't expecting it to last, at least until we see better participation numbers.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 11/7/2023
LT Trend Model: SELL as of 12/18/2023
USO Daily Chart: Crude Oil made its move this week and broke out above short-term overhead resistance. We have a new level of resistance to deal with now and it is very strong based on the number of "touches" on that line. However, given the positive looking indicators, we are expecting a breakout. The RSI is positive and the PMO has just overcome the zero line.
USO/$WTIC Weekly Chart: We should expect prices to continue higher based on the weekly chart. The weekly RSI just reentered positive territory above net neutral (50). The weekly PMO is beginning to bottom. We also have a symmetrical triangle. This continuation pattern suggests a breakout ahead given the prior trend was up going into the pattern.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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