The market rebounded nicely today, supposedly in response to the employment report. We think it was more of a case of being too oversold.
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.
Watch the latest episode of DecisionPoint on our YouTube channel here!
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: SPY recaptured horizontal support, but was unable to recapture the rising trend line. Volume contracted somewhat.
SPY Weekly Chart: The market is still within about one percentage point of all-time highs.
New 52-Week Highs/Lows: New Highs contracted in spite of today's rally. There is a High-Low Differential negative divergence.
Climax Analysis: Today's rally was reasonable considering yesterday's downside exhaustion climax. We are holding our breath as to how things will go next week. 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 DOWN and the condition is OVERBOUGHT.
The STOs have become somewhat oversold based upon the lows earlier in the five months of the rally. Percent of PMOs Rising is very oversold.
Intermediate-Term Market Indicators: The intermediate-term market trend is BULLISH and the condition is NEUTRAL.
The PMO is beginning to drop from overbought levels. The ITBM and ITVM have formed a negative divergence and have dropped from the recent top to the neutral zone.
_______
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.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
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.
Participation is still excellent except for the Percent of Stocks > 20EMA, which deteriorated substantially this week, but it is an indicator that can repair itself quickly. The Silver Cross Index (SCI) dropped below its 10-day EMA, adopting a bearish bias.
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.
**************************************************************************************
CONCLUSION: It was an exciting week, considering that SPY only lost -0.89% for the week. The rising trend line for the rally was finally broken, but is is not out of the question that it can recover. The short- and intermediate-term indicators are falling and have plenty of room to go lower. Bottom line is that we have a setup for going lower, but it could be another fakeout.
Erin is 75% long, 0% short.
**************************************************************************************
Have you subscribed the DecisionPoint Diamonds yet? DP does the work for you by providing handpicked stocks/ETFs from exclusive DP scans! Add it with a discount! Contact support@decisionpoint.com for more information!
BITCOIN
Bitcoin Daily Chart: Bitcoin is struggling to stay within the triangle formation.
Bitcoin Weekly Chart: Bitcoin has broken to the right of the line defining the parabolic advance. There is the potential for much lower prices.
BITCOIN ETFs
Today:
This Week:
These charts are sorted by PMO value.
INTEREST RATES
Treasury yields are in a rising trend, and we expect them to stay within the range set from 2023 to present.
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
The rising wedge implies that a breakdown will eventually take place.
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).
--
This week the 30-Year Fixed Rate changed from 6.79 to 6.82.
Here is a 50-year chart for better perspective.
BONDS (TLT)
IT Trend Model: SELL as of 3/20/2024
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: TLT is testing the bottom of a triangle formation.
TLT Weekly Chart: As expected, TLT broke out of the bullish falling wedge formation, but upward progress has stopped in favor of sideways movement. We are negative on bonds for the long-term.
DOLLAR (UUP)
IT Trend Model: BUY as of 1/23/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: [[comments]]
UUP is struggling with overhead resistance.
UUP Weekly Chart: When the resistance from the 2023 top is overcome, resistance from the 2022 top is dead ahead.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Since the long-term breakout point in March, GLD has advanced over 11%.
GLD is going parabolic in the short term. Worst case would be a pullback. Alternatively, we could see a sideways move as we had in March. Either way a less accelerated angle of ascent would be established.
GLD Weekly Chart: The parabolic is even more obvious in this time frame.
GOLD MINERS Golden and Silver Cross Indexes: GDX has almost made it to the top of the rising trend channel. While it could pull back within the channel, it looks as if it will not be forming a bearish rising wedge.
CRUDE OIL (USO)
IT Trend Model: BUY as of 2/12/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: The saucer with handle formation continues to deliver a bullish outcome.
Overhead resistance may slow USO down next week.
USO/$WTIC Weekly Chart: This week USO broke out of a long-term triangle, and the weekly PMO is rising above the zero line.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
(c) Copyright 2024 DecisionPoint.com
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.
DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.
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.
Helpful DecisionPoint Links:
DecisionPoint Alert Chart List
DecisionPoint Golden Cross/Silver Cross Index Chart List
DecisionPoint Sector Chart List
Price Momentum Oscillator (PMO)