You'll notice in "Today's Market Summary", that the Nasdaq 100 finished the day higher. Carl and I talked about possible reasons we could be seeing some outperformance (falling slower) by the Nasdaq and the NDX in particular. Below is a chart that shows that the NDX is down the least. My educated guess is that the so-called "bargains" are being highlighted in the Technology sector among analysts. No one wants to miss out on the market bottom and most analysts know that XLK tends to move faster to the upside than other sectors in a bull market. Likely this has helped the NDX and the Nasdaq in general. I also added the global markets chart so you can see how the pain is being spread across the globe like the virus.
CURRENT BROAD MARKET DP Signals:
On Friday, the 50-EMA crossed below the 200-EMA on the OEX. This triggered a Long-Term Trend Model SELL signal which I've annotated below. The NDX is now the only one holding onto a LTTM BUY signal, but that should go away later this week unless price rises above the 200-EMA which is not going to happen (I hope to be proven wrong!).
TODAY'S Broad Market Action:
Past WEEK Results:
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.
One WEEK Results:
IT Trend Model: NEUTRAL as of 2/28/2020
LT Trend Model: SELL as of 3/19/2020
SPY Daily Chart: We have now fallen below important support at 230. Unfortunately that means the next area of strong support isn't going to arrive until the SPY reaches 210 level or at the 2015 top. That would put the SPX down by about 37.6% from the all-time high. If that doesn't hold, which I suspect will be the case, the next level would take price down to the 2014/2016 lows around 1800.
Climactic Market Indicators: We are seeing what typically would be called 'climactic' readings, however, we have certainly seen more climactic readings previously. The best news is that the VIX is actually rising on the inverse scale and is now reading within the Bollinger Bands.
Short-Term Market Indicators: The ST trend is DOWN and the market condition is NEUTRAL based upon the Swenlin Trading Oscillator (STO) readings. These indicators will likely have to move back to oversold territory before I would look for a solid market bottom.
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 declining. We've hit extraordinarily low numbers on the SCI and we are finally seeing oversold readings on the GCI. We will want to see the GCI turn back up before we should expect a solid market bottom.
The IT trend is DOWN and the market condition is EXTREMELY OVERSOLD based upon all of the readings on the indicators below. Deceleration is appearing on these indicators, but none have turned back up yet. Even if they do, we will want to see positive crossovers before getting bullish.
CONCLUSION: The ST and IT trends are DOWN. Market condition based on ST and IT indicators is VERY OVERSOLD. The VIX is calming down, but the reading is still at 61! I continue to watch for any bullish behavior, but we don't have it yet.
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IT Trend Model: NEUTRAL as of 3/9/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: The Dollar is very volatile. Interestingly, I think you could make a case for a flag formation. I suspect we will continue to see the Dollar rise. The PMO appears very overbought, but in reality, it would still be within normal bounds until it hits 1.5 or 2.0.
IT Trend Model: BUY as of 12/26/2019
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold woke up and the 1450 level appears safe again. The PMO has turned up and it appears we will have a positive 20/50-crossover this week. That would give Gold an IT Trend Model BUY signal.
GOLD MINERS Golden and Silver Cross Indexes: We are beginning to see some consolidation into a symmetrical triangle (best seen in the thumbnail). Unfortunately, that is a continuation pattern so the expectation is a breakdown.
CRUDE OIL (USO)
IT Trend Model: Neutral as of 1/27/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: Oil seems to have found some sturdier support at $4.50. If that does not hold, the long-term chart suggests we could see $17.00/barrel for WTIC.
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: After breaking down from the parabolic, price has been acting wacky. This is actually constructive for a parabolic breakdown. I do expect to see more chop with a probable test of $180 again.
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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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