We have a tale of two timeframes to review. The gapped up strongly on the open. It appeared we were in for a solid rally continuation. Unfortunately by day's end, price had retraced back to yesterday's close and then below that in last 10 minutes of trading. Not a great vote of confidence going into tomorrow. We do have a falling wedge on the 10-minute bar chart which is supposed to resolve to the upside. NOTE: The SPY closed up 0.10%.
On the daily chart I've annotated what could be a rising wedge developing. We need another bar with a top lower than today's. This means that we could see price rally again tomorrow and maybe start setting up a top that won't create a bearish rising wedge. Basically we can't call it a wedge pattern until we have a second top and that requires a lower high.
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: I would feel a lot more bullish had we not seen the drop into the close. We'd finally popped into the zone of resistance, above support at the June low and we had an increase in total volume. Instead it tells me that resistance was too strong and price was turned away on above average volume. The good news is that the PMO was unfazed and the OBV is still showing rising bottoms. Would like to have seen an OBV reading above the previous top though.
Climactic Market Indicators: I didn't annotate it, but we do have declining positive numbers on advances-declines. It just a possible caution flag, but with only two days, it doesn't really constitute a negative divergence yet. Of concern is the VIX which did get turned away at the upper Bollinger Band, this usually precedes a decline.
Short-Term Market Indicators: The ST trend is UP and the market condition is NEUTRAL based upon the Swenlin Trading Oscillator (STO) readings. The STOs were also unfazed by the end of day pullback. They continue to rise and suggest more upside.
Intermediate-Term Market Indicators: The Silver Cross Index (% of SPX stocks 20EMA > 50EMA) is rising off a positive crossover which is bullish. The Golden Cross Index (percent of SPX stocks 50EMA > 200EMA) is still technically declining but it appears that it will be turning up soon.
The IT trend is DOWN and the market condition is OVERSOLD based upon all of the readings on the indicators below. Excellent look on the IT indicators. No complaints here.
CONCLUSION: The ST is UP and IT trend is DOWN. Market condition based on ST indicators is NEUTRAL and based on IT indicators is OVERSOLD. If we hadn't seen the slide at the close I would feel much more confident given the majority of indicators are bullish. There is a bullish falling wedge on the 10-min bar chart too. What isn't bullish? The VIX turning down at the upper Bollinger Band on the inverse scale, a possible rising wedge forming and a pullback on the advances-declines.
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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 PMO turned down below its signal line in overbought territory. $27 is holding up as support, but given the very negative PMO, I would look for UUP to pullback further.
IT Trend Model: BUY as of 12/26/2019
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Like the market in general, Gold closed well off its highs. It is now back below the 1700 support level. I am still bullish on Gold (full disclosure: I own GLD) and I actually looked at a Gold Miner in the Diamonds Report today (GOLD). The green bars show us discounts on PHYS, that shows us investors are interested in Gold. I see a bull flag that executed on Friday. If I weren't such a stickler on chart patterns, I would note a reverse head and shoulders pattern. They are reversal patterns though...they need to form after a declining trend, not a rising one like this did. The possible double-top that Carl mentioned in the Weekly Wrap appears to have dissolved with breakout today. Overall, the chart is favorable with a rising, yet not overbought, PMO and the breakout.
GOLD MINERS Golden and Silver Cross Indexes: The Silver Cross Index had a positive crossover today in oversold territory. The thumbnail shows a nice short-term rising trend. It closed just above the 50-EMA and traded above the 200-EMA again. With the SCI positive crossover, I am looking for GDX to continue higher. The $26 support level is something to pay attention to given the multiple touches from last Fall.
CRUDE OIL (USO)
IT Trend Model: Neutral as of 1/27/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: Carl and I noted a possible bull flag forming on USO coming alongside a PMO BUY signal. Well, the flag failed. The PMO is decelerating somewhat. I honestly like USO and want to find the best entry as there is a lot of upside potential when this clears up. This could be an opportune entry point on today's pullback, just note that a drop down to test support at $4 would mean an over 20% loss.
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: TLT broke down from a nice rising trend channel and the PMO has turned down. I would watch that 20-EMA closely. Support should hold there if we are going to see a resumption of the short-term rising trend.
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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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