Apple (AAPL) saw an earnings beat after hours and as of this writing it is up +6.34% in after hours trading. This is also affecting SPX futures which are currently up around +1.5%. Apple is a clear bellwether for the market as a whole and this certainly could skew trading tomorrow. We also have the jobs report tomorrow which could put a damper on the market depending on its outcome.
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/INDUSTRY GROUP/SECTOR INDEXES
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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: There is a bit of a rising trend right now, but ultimately the market has been churning after the initial bottom. The rally was not strong enough to turn the PMO back up.
The rally also did not help Stochastics which are still in decline suggesting internal weakness is still visible. The VIX is comfortably above its moving average on our inverted scale which is good.
Here is the latest recording from Monday, April 29th:
S&P 500 New 52-Week Highs/Lows: New Highs were not propelled higher on the rally and we still saw a number of New Lows. Fortunately, the High-Low Differential is still rising.
Climax* Analysis: Today there were two climax readings and an "almost" on the four relevant indicators, giving us an upside initiation climax.
*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 NEUTRAL.
We saw an upside turnover on the Swenlin Trading Oscillators (STOs) today which bodes well and there was some expansion to participation and rising PMOs.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
We also saw an upside reversal on both the ITBM and ITVM which confirms the now rising STOs. We still need to see more PMO BUY Signals. They did gain a percentage point today.
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 market bias is BEARISH in all three timeframes.
The rally certain put a positive spin on the short term, but the ST Bias is still considered bearish as %Stocks > 20/50EMAs are below our bullish 50% threshold. Both the Silver Cross Index and Golden Cross Index are below their moving averages and falling giving us a BEARISH Bias in the IT and LT.
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: The whole complexion of the market changed today, but we aren't so certain it will result in a big rally to upside. Certainly indicators look less bearish with rising STOs/ITBM/ITVM and we got an upside initiation climax that would suggest the market will follow through with more upside tomorrow. Apple's after hours burst also suggests we will see more upside given the leadership role it holds in the indexes. The ground work has been laid for the market to continue higher, but the jobs report could pose a problem. We see the market churning and would thus exercise caution moving forward. Stops should do the trick.
Erin is 30% long, 0% short.
Calendar: The six-month period of unfavorable seasonality began yesterday.
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BITCOIN
Bitcoin managed a rally today that almost put it back above prior support. It wasn't enough to fix the bearish indicators so we expect to see it ultimately move lower, down to 50,000.
BITCOIN ETFs
INTEREST RATES
Yields continued to fall and could be ready for a pullback. We will be watching the short-term rising trends closely.
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
Yesterday's comments still apply:
"Stochastics are dropping fast on $TNX and the PMO has topped. This level of resistance is sturdy. We see rates ultimately rising, but in the short term, we should prepare for more decline."
BONDS (TLT)
IT Trend Model: SELL as of 3/20/2024
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: Today TLT formed a bullish engulfing candlestick that implies more upside tomorrow. Yields are beginning to soften with a declining trend on the 20-year yield specifically. The PMO is nearing a Crossover BUY Signal and Stochastics are rising. We should see more upside, though we don't expect it to be significant.
DOLLAR (UUP)
IT Trend Model: BUY as of 1/23/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: We didn't get a gap down move but this was a significant decline for the Dollar. The prior gap was nearly filled. Even if we don't get an island reversal, a filled gap would also imply more decline. There is a new PMO Crossover SELL Signal and Stochastics are diving lower. We expect more downside.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: A bad day for the Dollar did not translate into a nice rally for Gold. It wasn't down nearly as far as the Dollar, but it fell nonetheless. We see a bullish falling wedge pattern that should resolve with an upside breakout. The Dollar does look particularly weak right now and that eventually help Gold.
Discounts popped near-term and are near levels we saw before the rally out of February lows. We think sentiment needs to get more bearish but this is a good start. The PMO is still in decline and Stochastics are below 20 so Gold is still very weak.
GOLD MINERS (GDX) Golden and Silver Cross Indexes: Participation is still strong for Gold Miners and that suggests support will hold here. If Gold would finally get going that would help. The PMO is still declining along with Stochastics so we do believe support will at least be tested.
CRUDE OIL (USO)
IT Trend Model: BUY as of 2/12/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: Crude Oil was unchanged which was a win considering the last four days of decline. We don't think it will be enough to turn the bus around given the negative RSI, falling PMO and Stochastics below 20. We would look for the 200-day EMA and possibly the rising trend tested.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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