We saw quite a pullback this morning but by the end of the day, the SPY was only down 0.11%. It isn't surprising on a down day to see defensive sectors lead, but what might surprise you is the strength they have been showing year-to-date or longer. I've taken the sector charts below right out of the Sector ChartList that is available to members only. Just go to the left side of the "Blogs and Links" page and you'll see the Sector ChartList link near the top. The best part of these charts is that they all include some important indicators that you don't usually see on sector charts. Very insightful!
XLU has activated a bull flag today. While the PMO is overbought, it is attempting rise again. OBV bottoms are rising and look at the percentages on the rest! Nearly every stock in this sector is participating in the rally.
Staples aren't usually that sexy but they have been in a nice rising trend for a year. The Golden Cross Index is at 91! That means that 91% of the stocks in XLP have 50-EMAs above their 200-EMAs.
Real Estate flattened late last year, but as of late, we are seeing a strong breakout in these stocks. The sector isn't that overbought.
TODAY'S Broad Market Action:
Top 10 from ETF Tracker:
Bottom 10 from ETF Tracker:
On Friday, the DecisionPoint Alert Weekly Wrap presents an assessment of the trend and condition of the stock market (S&P 500), the U.S. Dollar, Gold, Crude Oil, and Bonds. Monday through Thursday the DecisionPoint Alert daily report is abbreviated and covers changes for the day.
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Each S&P 500 Index component stock is assigned to one, and only 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.
IT Trend Model: BUY as of 9/6/2019
LT Trend Model: BUY as of 2/26/2019
SPY Daily Chart: A volatile trading day as price did open low, traveled to make a new all-time intraday high and then settled in slightly lower to close in the red. The PMO is rising nicely out of somewhat overbought territory. Volume was lower which is not a bad thing on a decline. The OBV continues to confirm the February rally.
Climactic Market Indicators: New Highs are elevated but no other climactic activity. The VIX remains at its average, not telling us much except that it is in a rising trend on the inverse scale which is bullish.
Short-Term Market Indicators: The ST trend is UP and the market condition is MODERATELLY OVERBOUGHT. Notice what the STOs did in mid-January before the correction. They are doing it again. Of all my indicators, these bother me the most. The %SA20/50-EMAs ticked lower.
Intermediate-Term Market Indicators: The Silver Cross Index (% of SPX stocks 20EMA > 50EMA) and the Golden Cross Index (percent of SPX stocks 50EMA > 200EMA) are trying to bottom. The GCI at least had a positive crossover.
The IT trend is UP and the market condition is NEUTRAL based upon the ITBM and ITVM readings, and SOMEWHAT OVERBOUGHT based upon the PMO and Silver Cross/Golden Cross Index readings. Based on our indicators, the intermediate term is looking good. We have positive crossovers and rising readings on all but the SCI.
CONCLUSION: The ST and IT trend are UP. Market condition based on ST and IT indicators is NEUTRAL to MODERATELY OVERBOUGHT. I continue to be concerned about the negative divergences on the Swenlin Trading Oscillators. They are acting just as they did before the last correction. I suspect we will see a pullback, but I don't think it'll effect the overall rising trend.
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IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: The Dollar continues to rise which has set the PMO in extremely overbought territory. Other than an overbought PMO, however, the rest of the chart looks great and I would expect more follow-through.
IT Trend Model: BUY as of 12/26/2019
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold continues to make its way toward the apex of a symmetrical triangle. It's a continuation pattern so we should see an upside resolution.
GOLD MINERS Golden and Silver Cross Indexes: I'm thinking that the cup and handle could be a busted pattern. On the bright side though, we do have a symmetrical triangle that has formed on the failure to breakout of the cup and handle. An upside breakout is suggested. We will need to see some improvement on the SCI before I'd expect that.
CRUDE OIL (USO)
IT Trend Model: Neutral as of 1/27/2020
LT Trend Model: BUY as of 12/16/2019
USO Daily Chart: Oil made another nice upside move. It hasn't quite executed the short-term double-bottom pattern, but a breakout above the confirmation line is looking good as the PMO has turned back up and you can see above average volume coming in on the rally.
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Well, price turned up today and could already be busting the double-top. Let's keep a close eye on the PMO. It is trying to trigger a SELL signal.
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Technical Analysis is a windsock, not a crystal ball.
Happy Charting! - Erin
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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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