Looking at yesterday's 10-min bar chart, I had pointed out the bullish descending wedge. It executed today. After that, price unsuccessfully tested the declining tops trendline twice. The rally at the end of the day did end that declining trend and we closed above resistance at the 3/27 low. There is a gap from Tuesday that needs to be filled.
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: Overhead resistance proved too much for the market. After reaching a strong 'zone of resistance', the 20-EMA and the Fibonacci Retracement line, price gapped down. Volume was lower, but still well-above the annual average. The Bollinger Bands on the VIX are beginning to contract. That means that readings will be hitting the top Band soon. That is an overbought condition in a bear market. We will want to watch this carefully.
Climactic Market Indicators: Well, yesterday's gap down turned out to be a selling exhaustion rather than an initiation. Today's headline shows us that so far, our short-term breadth indicators have been quite helpful. Declining tops in negative divergences with rising tops on price are coming right before downturns. We also saw a positive divergence--while price was falling, there were rising bottoms on the breadth indicators which suggested less negativity below the surface. Unfortunately today's readings are not really climactic and aren't telling us much right now. The VIX is rising on the inverted scale, but the upper Bollinger Band is close by 41.10. I could see some follow-through on today's rally based on the lower VIX readings and the 10-min bar chart I opened with.
Short-Term Market Indicators: The ST trend is UP and the market condition is NEUTRAL based upon the Swenlin Trading Oscillator (STO) readings. Remember how all of these indicators started moving lower yesterday despite a nice gain on the day for the SPY. They are in neutral and falling which isn't bullish, but we did get a move back up on %Stocks >20EMA and %PMO Rising.
Intermediate-Term Market Indicators: The Silver Cross Index (% of SPX stocks 20EMA > 50EMA) actually rose yesterday from 2.2 to 2.4 and it moved up another two tenths today. Nothing to write home about but it is beginning to travel in the proper direction. The Golden Cross Index (percent of SPX stocks 50EMA > 200EMA) is still declining but decelerating as it approaches zero. I believe it is a good sign to see deceleration on the GCI, but we need it to actually bottom.
The IT trend is DOWN and the market condition is VERY OVERSOLD based upon all of the readings on the indicators below. Indicators are already topping. We need a repeat performance on these indicators similar to end of 2018 bear market. They never topped. This tells me that we haven't reached the ultimate bear market bottom yet.
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. Market action on the 10-min bar chart alongside a contracting VIX suggests a follow-on to today's move, but it seems we are up one day and down the next and so on. But when you extend out the range and look at the STOs, they are bearish. Let's see how the short-term indicators stack up tomorrow... a rising trend continuation tomorrow based on VIX with a likely exhaustion showing up by the end of the day or early next week.
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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 traded above the $27 line of support and appears it wants to close up the gap. Given the negative PMO, I suspect it will find that area to be resistance.
IT Trend Model: BUY as of 12/26/2019
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Excellent day for Gold but it hasn't quite broken out of its short-term declining trend. I'm happy to see the PMO turning back up. We do have what could possibly be considered a reverse head and shoulders pattern which is bullish. According to textbooks, head and shoulder patterns are 'reversal' patterns. So a reverse head and shoulders should come out of a declining trend, not a rising one. In any case, Gold indicators look good enough to suggest a move to test 1700 again.
GOLD MINERS Golden and Silver Cross Indexes: With the help of Gold, I suspect, Gold Miners had another fabulous day. Overhead resistance around $26 could be a problem. $26 not only where price resistance lies, it also coincides with the 50/200-EMAs. The SCI is positive and did make a positive crossover, so a breakout isn't out of the question.
CRUDE OIL (USO)
IT Trend Model: Neutral as of 1/27/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: USO and WTIC had spectacular rallies today on very heavy volume. The PMO has finally turned up in a meaningful way. My concern is the 20-EMA arriving quickly as resistance. While we could be seeing a bottom finally in Oil, I wouldn't look for an intense rally. Likely, supply will continue to be high and demand will continue to be low.
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Yesterday's comments still apply: "Although the PMO is very overbought, it is still rising. I suspect it will move to test the all-time high based on the head and shoulders pattern I'm seeing on the 30yr Treasury Yield. The pattern has executed. Lower yields mean higher prices on bonds."
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Technical Analysis is a windsock, not a crystal ball.
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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.
Helpful DecisionPoint Links (Can Be Found on DecisionPoint.com Links Page):
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)